The Savvy Wallet

Outsourcing Pros and Cons: Should You Outsource or Insource? Outsourcing is the practice of hiring external workers or companies to perform certain tasks or functions that are not part of your core business. In contrast, insourcing is the opposite: keeping those tasks or functions within your own organization, either by hiring new employees or training existing ones. Both outsourcing and insourcing have their advantages and disadvantages, depending on the nature of your business, the type of work involved, and your goals and budget. In this blog post, we will explore some of the pros and cons of outsourcing and insourcing, and help you decide which option is best for you. Outsourcing Pros Cost savings : Outsourcing can help you reduce your operational costs, such as salaries, benefits, taxes, office space, equipment, and training. You can also take advantage of lower labor costs in other countries or regions, especially for tasks that do not require a high level of skill or expertise. ...

Onshoring vs. Offshoring: What’s the Difference and Which One is Better for Your Business? Outsourcing is a common practice among businesses that want to reduce costs, increase efficiency, and access specialized skills or resources. Outsourcing can be done either domestically or abroad, depending on the needs and preferences of the business. These two types of outsourcing are known as onshoring and offshoring, respectively. But what are the advantages and disadvantages of each option, and how can you decide which one is best for your business? In this blog post, we will compare and contrast onshoring and offshoring, and provide some tips on how to choose the right outsourcing strategy for your business. What is Onshoring? Onshoring is the process of outsourcing work to a third-party provider within the same country as the business. For example, a German company that hires a German software development firm to create a mobile app is onshoring. Onshoring can also refer to relocating a bu...

The Stock to Flow Ratio Explained The stock to flow ratio (S2F) is a popular indicator that measures the scarcity of an asset by comparing its total supply (stock) with its annual production (flow). It is often used to analyze commodities such as gold, silver, or bitcoin, which have a limited or predictable supply. In this blog post, we will explain what the stock to flow ratio is, how it is calculated, and why it is useful for investors. We will also look at some examples of how the stock to flow ratio can be applied to different assets, and what it can tell us about their future value. What is the stock to flow ratio? The stock to flow ratio is a simple formula that divides the total amount of an asset that exists (stock) by the amount of new units that are produced each year (flow). For example, if there are 1000 units of an asset in circulation, and 100 new units are created every year, the stock to flow ratio is 10. The higher the stock to flow ratio, the more scarce the asset is....

The (Pearson) Correlation Coefficient: What It Is and How to Use ItIf you are interested in finding out how two variables are related to each other, you might want to use the Pearson correlation coefficient. This is a statistical measure that quantifies the strength and direction of the linear association between two variables. In this blog post, we will explain what the Pearson correlation coefficient is, how to calculate it, and how to interpret it. What is the Pearson correlation coefficient?The Pearson correlation coefficient, also known as the product-moment correlation coefficient, is a value that ranges from -1 to 1. It tells us how closely two variables follow a straight line when plotted on a scatterplot. The closer the value is to 1 or -1, the stronger the linear relationship. The closer the value is to 0, the weaker the linear relationship. The sign of the value indicates the direction of the relationship: positive means that the variables move in the same direction, negativ...

What You Need to Know About Bitcoin Halving Bitcoin halving, also known as “the halvening”, is a major event in the life cycle of Bitcoin. It occurs approximately every four years or after every 210,000 blocks are mined. During a halving, the number of bitcoins (BTC) that enter circulation roughly every 10 minutes, known as block rewards, is reduced by half 1 . Why does Bitcoin halving happen? Bitcoin halving is a mechanism designed by Satoshi Nakamoto, the anonymous creator of Bitcoin, to control the supply and inflation of the cryptocurrency. Bitcoin has a fixed maximum supply of 21 million coins, which is expected to be reached by the year 2140. By halving the block rewards every four years, the rate of new bitcoins entering the market slows down over time, creating scarcity and increasing demand. When is the next Bitcoin halving? The next Bitcoin halving, the fourth such event, will take place around mid-April 2024. The exact date depends on the speed of the network, which can vary...

Repurchase Agreements (Repo) & Reverse Repurchase Agreements: What You Need to Know If you are interested in the money market, you may have heard of repurchase agreements (repo) and reverse repurchase agreements (RRP). These are short-term transactions that involve the exchange of securities and cash, with a promise to reverse the deal at a later date. But what exactly are repos and RRPs, and how do they work? In this post, we will explain the basics of these financial instruments, their benefits and risks, and how they are used by different market participants. What are repos and RRPs? A repurchase agreement (RP) is a contract where one party (the seller) agrees to sell a security to another party (the buyer) for a certain amount of cash, and also agrees to buy back the same security at a higher price on a specified future date. The difference between the initial sale price and the repurchase price is the interest that the seller pays to the buyer for borrowing the cash. The secur...

Living Below and Above Your Means Living below your means is a simple but powerful concept that can help you achieve financial freedom and build wealth over time. It means spending less than you earn, saving the difference, and investing it wisely. Living above your means, on the other hand, is the opposite: spending more than you earn, borrowing the difference, and accumulating debt. Why Living Below Your Means Matters Living below your means has many benefits, such as: Reducing stress : When you spend less than you earn, you don’t have to worry about paying your bills, covering emergencies, or meeting your financial goals. You have more peace of mind and less anxiety. Increasing happiness : Studies have shown that money can buy happiness, but only up to a certain point. Beyond that, more money does not necessarily mean more satisfaction. In fact, some people who live above their means may feel unhappy, insecure, or envious of others. Living below your means allows you to focus on wha...