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Wealth Hacks

7 Ways Satellites Impact Investments

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“Ipsa scientia potestas est” said one great thinker, which translated, meant in knowledge itself is power. In today’s global quest for power, everyone is looking into the sky for the answer. And no, it’s not blue sky thinking, but satellites.

While we have the one Hubble looking out into the universe, we have hundreds more pointing back at us. These earth-facing satellites tells us stories of ourselves that we could otherwise not know. Here are ways these eyes in the sky impact human lives and investments.

  1. Estimating global oil inventories

Oil inventory is one application of satellites. Ursa Space Systems can estimate oil inventory globally using proprietary algorithm and space images. This is important as official state figures are deliberately inaccurate. This is for national security reasons.

Hence, it helps investors to know what exactly is in storage. Low storage means high demand. Inversely, high storage means oversupply and potential price drop.

  1. Forests and woods

The rate of deforestation is another area of interest. Imazon provides government with imagery showing the rate of deforestation of the Amazon. This helps policy makers to understand the severity and rate of deforestation. Investors can use this information to assess the risks of policies against their portfolio.

  1. Farms and Crops

On the flip side of deforestation is agricultural data. TellusLab Inc specializes in rationalizing satellite data to understand and estimate crop yields. This started with soy and wheat has expanded into palm oil, coffee and cocoa. These data helps commodity investors to hedge against a particular crop and country.

  1. Surveying oil fields

Iceye is a unique satellite system helping oil producers unlock trapped oil and gas reserves in cold environment. This system can pinpoint where the permafrost is melting and releasing trapped natural gas. This takes away all the guesswork of Artic oil and gas exploration. This level of certainty gives investors confidence in their related portfolio.

  1. Global fishing activities

Fishing is one area satellites help both private sector and public sector. NGOs like Global Fishing Watch use satellite data to map vessels, location and rate of fishing. Vessels that fish in non-fishing zones are reported to the authorities for swift action.

In general, this data helps investors to predict the trends in fishing supply and demands. Where there is over-fishing, prices will drop. After some time, the inevitable correction will kick-in for a strong buy.

Time to fishing for the right stocks then!

  1. Urban Development with satellite guidance

Urban development has high impact on human lives. A poor design could lead to high loss of lives. However, if done well, it could make a city into a powerhouse. Using images from NASA’s Landsat and the European Space Agency’s Sentinel-1 satellite programs, World Bank researchers track expansion of urban cities. It helps town planners to understand potential risks.

It also helps economists and policy makers understand the impact of urban expansion. So, when disaster strikes, investors can assess the impact on their investments.

  1. Satellites on a budget

SpaceKnow offers a DIY spatial analytics platform approach to use of satellites. It can track number of cars in a parking up to shipping vessels and shipping lines. Any investors inclined in specific companies or industries can order custom reports.

This is the sort of powerful tools investors can play with today. It’s like having your own satellite without the hassle.

Besides helping investors make sound decisions, satellite also help governments and NGOs. They use the power of satellites to observe climate change and biohazards such as virus spreads. Even pilots use tools like EarthCast to predict actual turbulence during their flights.

The next time you look up the skies, smile. You don’t know who’s looking back at you.

Wealth Hacks

Here’s Why You Should Never Sit On Too Much Cash…

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According to a recent NerdWallet survey, Americans sit on an average $32,286 in cash. Yet, a whopping 39% say they aren’t investing.

And yes, while nest egg is great, being too liquid also comes with a lot of downside. According to NerdWallet’s calculations, every $10,000 kept in cash over 30 years (vs. investing) comes out to $44,000 in lost returns.

“They’re potentially losing tens of thousands of dollars in compound interest,” financial expert Chris Hogan told FOX Business’ “Morning’s with Maria.”

Here’s why you should never sit on too much cash.

Interest rates (and inflation)

Interest rates are at an all-time low. Back in the day, 5% was common. These days, the average savings account offers a pathetic 0.6% return

Needless to say, those kind of rates won’t beat inflation over time. In other words, your money literally loses value just by sitting in your savings account. 

Despite this, the average saver—somehow—thinks it’s better to sit on the cash.

Of the participants in the study, 32% responded that they prefer to be able to access their money easily, so they choose to not invest. Another 28% said they didn’t know how to invest.

How much you should save

So what’s the alternative? Instead of having a nest egg, keep three to six months of expenses “parked in a money market account, not a savings account,” he said.

A money market account is basically a savings account, but you need at least $10,000 minimum deposit.

You can also consider moving it to a mutual funds or ETFs trading on the stock exchange, since most of them allow you to withdraw your funds anytime—and they offer much better returns than a savings account.

All in all, any cash over this 2% inflation threshold can be invested across various asset classes, most of which offer great returns on your investment.

How to choose an investment

The trick here is to research and invest in the funds that fit your bill and investment horizon.

The takeaway from this move is the massive compounding growth your investments will gain over time.

One of the best examples of this is Grace Groner’s, a regular American who bought three shares of Abbott for $180 back in 1935.

Due to compounded interest, the value grew to a $7M fortune less than seven decades later. Now that’s what you call a #WealthHack.

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Business

(WTF?!) Is The MBA Dead?

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Well, well, well, what do we have here.

So according to a (totally non-biased) press release from the Graduate Management Admission Council (GMAC) earlier this year, MBA grads are making more money than ever.

(Just for clarity, the GMAC is a “global association of leading graduate business schools.”)

Apparently, US employers plan to offer new MBA hires a starting salary of $115,000, the highest ever recorded in the US when adjusted for inflation.

Key words: PLAN. TO.

In spite of these lofty, non-scientific projections, the number of MBA applications—as a whole—is on the downslide. Here’s a chart from the otherwise very optimistic GMAC.

(Yes, the entire WealthLAB crew is MBAs, too. Jury’s still out whether that makes us marks or smart. 🙄)

And according to Forbes, this makes it the best time ever to pursue an Ivy League MBA.

So what does this all mean? Let’s unpack it for a second.

Top 10 programs are letting everyone in…

According to the various reports, some programs across the country have seen double-digit drops, with the top 10 business schools seeing serious declines. 

At the highly selective Yale University, the acceptance rate jumped by nearly 44%. Dartmouth College’s Tuck School of Business, another Top 10 program, admitted more than one in three of its applicants, a 48% increase in a single year.

Meanwhile its applications dropped by 22.5%.

“The joke among deans is that ‘flat is the new up,'” Andrew Ainslie, the dean of the University of Rochester’s Simon School of Business. “If we can just hold our numbers, that is an incredible achievement.”

Other Ivy League schools have dropped also, with Harvard measuring a fall of 4.5%. Meanwhile, big names like Stanford saw a bit more at 4.6% and UC-Berkeley Haas at a shaking 7.5%.

And outside the Top 10?

When these numbers are narrowed down to individual schools, like University of Michigan Ross School of Business, the picture gets worse. This university saw the biggest reduction, noting an 8.5% decline with just over 3,000 candidates applying. 

There are only a few reported exceptions to this overall decline, but the biggest business schools in the nation agree that there is a serious reduction in MBA interest. 

Ainslie says up to 20% of the top 100 MBA programs in the country are likely to close in the next few years. 

But why?

Uncertainty over work visas for international students, the strong US economy with decreasing job loss, and the rising costs of degrees are all noted as potential causes. 

The positive side to the story, as Ainslie pointed out, is that it’s going to spark new development in the design of existing MBA programs. One particular program has been built around entrepreneurship.

In addition, the prestigious post-MBA job paths—think investment banking and management consulting—have been replaced by jobs in the tech world and Silicon Valley.

Is entrepreneurship the new MBA?

“Tech has displaced consulting and finance as the preferred career path for top-tier college students,” says David Minnick, founder and CEO of Camino Data, and former president of beverage company, Purity Organic.

“When I started Princeton in 2003, it was still a big deal to get a MBA or JD/MBA after college,” he tells Forbes. “That was the thing to do.

“Four years later, when I graduated, we wanted to be more entrepreneurial. We saw people who had started successful tech businesses. We saw there were low barriers to entry, and that it was okay to fail.”

Image: Dunk The sum total of all human knowledge via @James_Kpatrick/ Flickr

Student debt vs. MVP?

There’s also the whole cost thing. Business school can run you $200,000, making it a cringe option for 20-somethings already riddled with debt. For founders, this is money better spent building an MVP.

(No, not Most Valuable Player. Minimum Viable Product.)

Not to mention the experience it brings.

“When I interviewed people with an MBA, or experience at a big beverage company like Coke or Pepsi,” says Minnick, :I was concerned that their personality type wouldn’t be the right fit for a young and growing company like ours.”

In his view, hustle, skills and culture fit are far better predictors of performance than a degree.

Ivy League MBA fire sale…🗑

Apparently this all means that IF you are one who’s always dreamed of an MBA from a prestigious school, there’s no better time than now.

“With an unprecedented decline in MBA application volume at many business schools – including iconic, top-tier programs – there’s definitely a ‘perfect storm’ happening for prospective applicants,” Alex Min, CEO of The MBA Exchange, a top admissions consulting firm, says.

“Deans and admissions committees are feeling strong pressure to fill available seats with qualified candidates, even if some of these individuals might not have been admitted in previous years when application volume was growing.”

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Personal Finance

VIDEO: 3 Things You MUST Know About Your Credit Score

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We all know what a credit score is. Sort of. But what really goes into your credit score? In this video, Investopedia breaks it down. Here are the top 3 factors that affect your credit score — and what you can do about it.

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