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Countering Uncertainty, and Building Wealth Early

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This article provides information for educational purposes. NerdWallet does not offer advisory or brokerage services, nor does it recommend specific investments, including stocks, securities or cryptocurrencies.

NerdWallet – NerdWallet

Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions.

This week’s episode starts with a discussion about overcoming uncertainty in our present moment.

Then we pivot to this week’s money question from Luca. Here it is:

“Hi Wallet Nerds,

I have used NerdWallet for quite some time and recently discovered your podcast, and am a very big fan. I have a few questions I would like to ask of the show.

I’m 16 and, as you can tell by me emailing you, a personal finance nerd. I want to know if there’s anything I can do now to help my financial future. I have a job, IRA, checking/savings accounts, and am an authorized user on my parent’s credit card. Is there anything else I can do?

Because I am a personal finance nerd, I also like looking into various accounts. I am not very satisfied with my current bank and want to switch. Are there any cons to having multiple accounts? What about closing old accounts? I feel confident in my ability to manage them and keep track of my money.

Thank you very much!

Sincerely,

Luca”

Check out this episode on any of these platforms:

Our take

Uncertainty seems like it’s here to stay. Whether you’re navigating a new COVID-19 variant, inflation or a climate change-related disaster, take steps to build your financial resilience and prepare for what you might encounter next. When it comes to managing your finances, take steps to shore up your savings and trim expenses where you can.

And you can also work to counter some of the current challenges. If you’re planning to travel to see your family over the holidays, you can build resilience into your flight or road trip. If you’re taking a flight, brush up on your airline’s change and cancellation policies. And if you’re driving, think about driving more slowly and using cruise control to save on gas.

To start building wealth early and set up your financial future, focus on your retirement savings. The longer your time horizon, the more time you’ll have for your money to grow. Also know what you want out of your money so you have goals to build toward. Additionally, if you’re in the market for a new bank account, take the time to shop around.

Our tips

  • Know how to direct your money: Whether you’re just getting started or are a seasoned veteran, a budget and defined financial goals can guide your money management.
  • Start investing: The sooner you start, the longer you’ll have to build wealth.
  • Shop around: Take the time to compare your options with financial products.

Have a money question? Text or call us at 901-730-6373. Or you can email us at [email protected]. To hear previous episodes, go to the podcast homepage.

Episode transcript

Liz Weston: Welcome to the NerdWallet Smart Money podcast where we answer your personal finance questions and help you feel a little smarter about what you do with your money. I’m Liz Weston.

Sean Pyles: And I’m Sean Pyles. To send the Nerds your money questions, call or text us on the nerd hotline at 901-730-6373, that’s 901-730-NERD, or email us at [email protected]. And to get new episodes delivered to your devices every Monday, be sure to subscribe. And if you like what you hear, leave us a review and tell a friend.

Liz: This episode, Sean and I answer a listener’s question about how to build wealth early. One tip: It’s never too early to start saving for retirement. But to start off this week’s show and our This Week in Your Money segment, Sean and I are talking about how to manage uncertainty.

Sean: Because it does seem like uncertainty is the only thing that is certain nowadays. With yet another COVID variant in the news, supply chain issues dragging on and inflation bouncing around different parts of the economy, Liz and I thought that now might be a good time to talk about how folks can weather uncertainty. And for me, the counter to uncertainty comes down to one of my favorite words, which is resilience.

And this is actually an idea that I got from my partner, who’s an architect. In the world of architecture, the conversation around building design has shifted from sustainability to resilience. And that’s in particular with climate change. And I think that this is applicable to our personal finance too. The idea is that you should always assume that there’s going to be some sort of disaster that will come and try to design longevity and ease of repair into your personal finance.

Liz: When we talked to Michelle Singletary from the Washington Post, she talked about living her life as if she were in a perpetual recession. So this is kind of the same idea that you want to focus on how you’re saving money, what you’re signing up for in terms of debt, how flexible you are in your finances.

Sean: And also focus on what particular crises you may face. When it does come to climate change, realize that in the Pacific Northwest, we might be getting ice storms or fires or who-knows-what next because as we’ve had all sorts of calamities come our way. In the realm of personal finance, realize that you might have an unexpected car expense pop up, which happened to me the past week, happened to my partner the week before that. So there’s always going to be something.

But one of the best ways to shore up your resilience is to focus on savings. And there are a few ways you can do that. One that seems pretty straightforward is to try to free up cash where you have more money to save by trimming expenses or paying off high-interest debt. Those are things that we talk about a good amount. Also think about talking with an investment advisor about whether your portfolio is well-balanced. That can help you be more resilient when it comes to your own investments.

Liz: We also like Roth IRAs here at NerdWallet. And there’s two reasons for that. One is that you’re building up tax-free money for retirement, which is always great, but also you can always take out your contributions. People get confused on this, but any amount that you put in, if you put in $5,000, you can always take out $5,000, no taxes, no penalties, anytime. Like the day after you put it in, you can yank it out. You won’t have to worry about the IRS.

Sean: Exactly. I also want to talk about how to focus on your resilience beyond money. I think it’s really important to shore up your relationships with your friends and your family because they can provide really important emotional support that can help you in a pinch if you need someone to talk with or even if you do need a little bit of cash to get through whatever emergency does pop up.

Liz: We talk about money a lot and we forget the bigger picture of the family relationships, friend relationships, and also your job. This is something to keep in mind that right now the worker is king. We probably have more leverage than we’ve had at least in my memory. You always want to try to be one of the top performers at your work if you possibly can. It doesn’t mean you can’t be fired and it doesn’t mean you can’t be laid off, but you’re lessening the chances.

Think about that. If you’re not in a good fit with your current career, now would be a great time to be looking around. If you are in a good fit, now is a great time to really invest in trying to be indispensable at your job. Keep in mind, you can be the best coal shoveler on the Titanic and you’re still going to go down with the ship. So it also depends on what industry that you’re in. In general, these are things you should be thinking about and thinking about where you going to be in five years. I know that’s always hard. You look at where you are today, could you have predicted that five years ago, Sean?

Sean: Even looking at what the world could be in five years, it’s hard to imagine. I felt last month for the first time that we were in a place where maybe I can begin to plan out six months in advance because the world seemed a little bit more stable, but then here we are, and things are up in the air again. So I try to strike a middle ground between doing what I can to make sure my future is going the way I hope it will, saving for retirement, continuing to save in my various other accounts, but also realizing that you need to have a certain amount of flexibility, again, that resilience to be able to adapt to whatever may come your way next.

Liz: One of the things I like to keep under control is debt. I’m not one of those people that thinks that debt is always bad, but I do think limiting it can be very helpful to letting you sleep at night and also your resilience if something goes wrong. You don’t have to worry about trying to make huge debt payments when your job gets ended or something else big happens. So we talk about the 50/30/20 budget all the time. If you can fit a loan payment into that 50% mark, and the 50% is the must-have expenses like shelter and transportation and food and utilities, insurance, minimum loan payments. If you can fit that minimum loan payment in there, maybe you can afford it, but even then, maybe be just a little bit careful about adding debt.

Sean: And unfortunately, for many Americans, we’re about to have a new debt that is actually an old debt in the form of our student loans. Many of us, myself included, are dreading this, of course, but the more we can prepare for it right now, go through your budget, realize what it’s going to mean to have these several hundred dollars likely, at least in my case, taken out of my budget each month, that will help me make sure that I do have the amount properly allocated within my 50%. And I might have to move around some other things. I’m probably going to have to cut some subscriptions and other discretionary expenses that I’ve been enjoying over the past almost two years at this point, but that will make it so that when I do have to resume my payments, I’m not in shock. I’ll be able to weather it.

Liz: And if you have federal student loans, you probably have income-driven options. So if you’re going to be struggling with the payments when they come back, you can look into that to lower the payments. If you have good credit and private student loans, you might be able to refinance those to a lower rate. Now’s the time to do it, before those payments hit.

Sean: I’ve been getting an email at least once or twice a week from the federal government and my servicer reminding me, oh, make sure that your autopay is set up properly. And I will have to change that because I changed my bank. And these are small things that we’re going to be nagged about constantly until payments do resume and I’m just putting it on my to-do list at the bottom. I’ll take care of it over the holidays. Eventually I’ll do it, but it’s good to get those things taken care of so you aren’t left blindsided by the payment that you have to make.

Liz: Put it on your calendar so that you deal with it.

Sean: We should also talk about a couple other things that are going on in this particular moment with the omicron variant right now. We don’t totally know how it’s going to play out. If you’re traveling for the holidays, it might be wise to know your airline’s change and cancellation policies if you do end up having to change your plan at the last minute. You don’t want to be left paying for a ticket that you’re not actually able to use if you don’t want to take that flight.

Liz: For a while there, it seemed like you could change anything at any time. The change fees got waived and now the airline policies can differ quite a bit. Obviously if you’ve already booked, there’s not much that you can do about it, but there are credit cards, those premium travel cards that have some travel insurance built into them. So always check that out if something changes. It does seem like the home tests are more available than they used to be. We test before we leave and then we also test when we get there just to make sure, because we have older family members to make sure that we’re not putting them at risk.

Sean: And [President Joe] Biden did announce last week that folks who have private insurance will be able to get the cost of tests reimbursed. So that’s going to be a little bit of a hassle I’m sure because dealing with insurance is never fun or easy.

Liz: So true.

Sean: But that way you can just recoup some of the costs. I also wanted to talk about how to save on gas because if you’re like me, you’ll be spending a lot on gas over the coming holidays.

There are a few tips that you can do. One is to slow acceleration, use cruise control and brake lightly. A NerdWallet expert found that this could boost your fuel economy by 37% if you do those three things. So that’s pretty significant. Another one that I always try to remind myself of is to slow down. According to a study from the car shopping website Edmunds, slowing down from 75 to 65 miles per hour can increase fuel economy up to 14%.

Liz: And obviously it’s safer and all those good things. It’s just so hard to do.

Sean: I know. I have a lead foot and a long drive ahead of me for the holidays. So I always want to try to get in like 10 more miles in that hour that I’m driving, but I also have a car that requires premium gas. So I don’t really want to be paying for that. Especially as I’m driving into California from Oregon, it’s going to be quite expensive.

Liz: That’s going to be some real sticker shock. I haven’t seen a gallon under $5 for a while. So, yeah, of course . . .

Sean: So you’re in LA?

Liz: I’m in LA and I have a Bolt.

Sean: Oh, I’m jealous.

Liz: I know, I know.

Sean: At least I’ll be splitting the cost with my partner.

Liz: Yeah.

Sean: I hope he knows that. If not he will when he listens to this. Another final tip I want to throw out is just to follow science. We know the news is changing quickly, but we’ve had pretty good tools at our disposal to keep ourselves and others safe for a while now. And that’s things like getting vaccinated, getting your booster shot, getting a good mask, preferably an N95 or something like that. And if and when you can, social distance.

Liz: I think we’re going to be dealing with this for quite a while. All right, well, I think we covered that. Let’s get onto this week’s money question.

Sean: This episode’s money question comes from Luca. Here it is:

“Hi Wallet Nerds,

I have used NerdWallet for quite some time and recently discovered your podcast, and am a very big fan. I have a few questions I would like to ask of the show.

I’m 16 and, as you can tell by me emailing you, a personal finance nerd. I want to know if there’s anything I can do now to help my financial future. I have a job, IRA, checking/savings accounts, and am an authorized user on my parent’s credit card. Is there anything else I can do?

Because I am a personal finance nerd, I also like looking into various accounts. I am not very satisfied with my current bank and want to switch. Are there any cons to having multiple accounts? What about closing old accounts? I feel confident in my ability to manage them and keep track of my money.

Thank you very much!

Sincerely,

Luca”

Liz: I love Luca. Luca is our kind of nerd. Getting an early start with investing is always good, but getting started as a teenager, that is huge. Those extra years could more than double the amount that Luca can put aside for retirement. This is awesome. Anyway, to help us answer Luca’s question on this episode of the podcast, we’re joined by one of our own personal finance Nerds, Kim Palmer.

Sean: Welcome back to the podcast, Kim.

Kim Palmer: Thank you so much for having me.

Sean: Our listener, who is the youngest that we’ve ever heard from, is looking for some advice about how to jumpstart their financial future. What do you think?

Kim: First I think we have to acknowledge that they’re off to such a strong start because so many people aren’t even thinking about money yet. I think it’s really great that they’re already so far ahead. There’s one area actually that they didn’t mention, and that is spending. I think it might make sense to take a deeper dive into how they’re currently spending money. One thing I’ve noticed is that once you get in the habit of saving and of spending less than you’re earning, it’s easier to maintain. What a perfect time to start that habit when you’re a teenager.

One tool we love at NerdWallet is the 50/30/20 budget. And that basically allots your take-home income into three different categories. You have 50% going toward needs, you have 30% going towards wants, and 20% going towards any debt payments and savings. Now, as a teenager, everything might not apply to you there. For example, you don’t probably have rent right now or a mortgage, but I still think it’s a useful tool just to start thinking about where your money is going.

Sean: I also think our listener should appreciate the really unique opportunity they have by starting building wealth so young. There’s the saying that youth is wasted on the young and for so many so is their time horizon for saving for retirement and investing? But I think that Luca might be an exception to this. And as you kind of nodded to, Kim, because they’re starting so young, they don’t have as many financial obligations. Like they probably don’t have student loans or a car payment or a rent, so they can maybe fudge the 50/30/20 to make it so that they can save a lot more right now.

Kim: I think that is a great idea. When it comes to investing, you do have to be 18 to actually go ahead and open and up a brokerage account, but it can definitely be something that you do along with your parents. And, as Liz mentioned, when you do start investing early, you have a head start. You have so much more time to grow your money. One thing I like to do with my kids is go through a company like Stockpile and buy fractional shares of really big companies that you’re already familiar with. For example, with my kids, they can take $25 and buy Netflix or Disney and see how the stock fluctuates. And I think it can just be a way to kind of get your head around what investing feels like, see if you like it.

Liz: Yeah, because one of the problems with getting started with investing is that sometimes the buy-in is really high. Like shares of companies that kids know and recognize might be $100 or more and that’s not easy to get started with. Or, if they’re looking at mutual funds, they can have an even higher minimum investment. So these fractional shares are a good way to get an early start.

Sean: But they will have to be 18 to open one of these accounts. How can they get around that? Is it that they’ll open one with their parents? And are there also any other limitations that Luca should look out for because they are still under 18?

Kim: There is definitely a limitation in that you have to be 18 to open some of these accounts, but the easiest way around it is if you do have the help of your parent, then they can do it for you or you can do it jointly. Liz, do you think I’m missing anything else you should be thinking about?

Liz: You’ve got to consider financial aid. If you think that you’re going to need financial aid to go to college, then you don’t want to have this money in the child’s name. Or you can do kind of a workaround, which is to open a Roth IRA. Now, there are contribution limits to those, but Roth IRA and other retirement money is not counted in financial aid formulas. So that’s a way to get around that concern that your holdings could interfere with how much financial aid you get.

Sean: One thing I keep thinking about is how lucky Luca is to have parents that have encouraged their kid to start building a solid financial foundation really early on. Adding them as an authorized user on the credit card, for example, will give Luca an early start on building good credit. Kim and Liz, I’m wondering if you can share any other tips that you have as parents for how parents out there can help their kids get started like Luca’s parents did.

Liz: Well, I think it’s like most things with parenting is that you start talking about it early and often. So it’s not a subject that’s being brought up at the last possible minute. When you take your child shopping, you can talk about the cost of things and how you decide what to buy and what not to buy. With our daughter, as soon as she was recognizing that money bought things, which was very early, like 3 years old I want to say, that’s when we started her with an allowance. And that’s very early, but we had some good experiences with it. That’s something to consider.

Sean: Right. And she seemed ready, right?

Liz: Oh yeah. Well, we’ve talked about this before. She was ready to save, she was ready to spend. She didn’t understand the sharing part. Why should she have to share her money? Then as she got older and she got jobs and started her own little business, we would match her earnings with Roth IRA contributions.

Sean: Oh, that’s cool.

Kim: That is very cool. My parents did the exact same thing and I really think it helped me. I think it helped me learn how to save.

One thing I’ve noticed with my kids is that from a very early age, like toddlerhood, they start asking for things and they have no qualms about spending your money. The good thing about that is that it gives me a chance and parents a chance to say no and to explain the whole idea of scarcity. We can’t have everything we want. That’s really the basis of learning how to budget right there.

As they get older, it morphs into a more complex conversation. For example, with my 12-year-old, we can have a more nuanced discussion about saving and putting money aside so you can afford something bigger. And I think as the kids get older, you can start having those more nuanced conversations, but it really starts I think around age 2.

Liz: Luca is also wondering about switching banks. Kim, what do you think they should know when they’re shopping around?

Kim: It’s a really good question to look into switching banks. A lot of people are afraid to switch banks and they just go with the flow of their current bank even though they’re not happy. I really encourage this line of thought to look at if another bank could serve your needs better. What you want to do when you start thinking about opening a new bank is first, see what would be a good fit. That starts with some online research. Where can we make sure we’re paying as few fees as possible? Where can we earn the highest APY? Where can we get the most for our money?

Once you do that comparison and you choose a good fit with your new bank, you just go ahead and you transfer any money that you have into the new account. You close your old one. And it’s really not as complicated as I think a lot of people worry that it is.

Sean: Or as a lot of banks might want you to think it is to switch banks like that. I did this in the past year. I had had a goal for a while to go from the big national bank I’ve been using since high school to a local credit union in the Pacific Northwest and it took me a while to actually muster up the energy to do it and it took me five minutes. It was shockingly easy.

Liz: Yeah. I think it’s more complicated when you have more bills to pay, especially if you’re autopaying through your bank account. So you may need to keep your old account open for a while for those to clear. But if you’re somebody like Luca, who’s just starting out, you can choose whatever bank you’d like. And an online bank might be a good fit because they tend not to have minimums and a lot of fees. You can start with a small amount and build from there.

Sean: But again, they’ll probably have to have their parents help to open any sort of account like this.

Liz: Luca is obviously in pretty good shape today and is already saving for their future. Kim, what else should Luca consider going forward?

Kim: Well, I think it really all goes back to getting in the habit of saving money. I think some of the habits that they’re establishing now really will last possibly their whole life. Of course, as a teenager, you might not have the same priorities that you will have in your 20s or 30s or beyond. So I think when you’re focused on saving and you have that savings cushion, it helps you have that flexibility. So wherever you turn, whatever priorities emerge over the next decade or two decades, if you have that savings habit, I think that gives you such a strong backbone to rely on.

Liz: Yes. Absolutely. And I love the fact that you talked about the importance of saving while you’re young because a lot of people just keep putting it off thinking, “well, in the future, I’ll have more money. It’ll be easier in the future.” It is never easier in the future. Start now. Do it now and you’ll have a lot more flexibility down on the road.

Sean: Well, Kim, thank you so much for talking with us.

Kim: Of course. Thanks for having me.

Sean: And with that, let’s get on to our takeaway tips. Liz, do you want to kick us off?

Liz: I would be delighted. First, know how to direct your money, whether you’re just getting started or are a seasoned veteran, a budget and defined financial goals can guide your money management.

Sean: Next up, start investing. The sooner you start, the longer you’ll have to build wealth.

Liz: Finally, shop around. Take the time to compare your options with financial products.

Sean: And that is all we have for this episode. Do you have a money question of your own? Turn to the Nerds and call or text us on the Nerd hotline at 901-730-6373. That’s 901-730-NERD. You can also email us at [email protected], and visit nerdwallet.com/podcast for more info on this episode. And remember to subscribe, rate, and review us wherever you’re getting this podcast.

Liz: And here’s our brief disclaimer thoughtfully crafted by NerdWallet’s legal team. Your questions are answered by knowledgeable and talented finance writers, but we are not financial or investment advisors. This Nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

Sean: And with that said, until next time, turn to the Nerds.

Podcast guest Kim Palmer owned a fractional share of Netflix at the time of this recording.

The article Smart Money Podcast: Countering Uncertainty, and Building Wealth Early originally appeared on NerdWallet.

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8 Ways You Can Save Yourself and Others From Being Scammed

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Opinions expressed by Entrepreneur contributors are their own.

Statistics on the number of scam websites that litter the internet are disturbing. During 2020, Google registered more than 2 million phishing websites alone. That means more than 5,000 new phishing sites popped up every day — not to mention the ones that avoided Google’s detection. In 2021, the U.S. Federal Bureau of Investigation (FBI) reported nearly $7 billion in losses from cybercrime that is perpetrated through these sites.

What exactly are scam websites? Scam websites refer to any illegitimate website that is used to deceive users into fraud or malicious attacks. Many scammers operate these fake websites and will download viruses onto your computer or steal passwords or other personal information.

Reporting these sites as they are encountered is an important part of fighting back. In other words, if you see something, say something. Keeping quiet, even if you avoid falling prey, allows the scammers to aim at another target.

Perhaps you’ve received a suspicious link in an email? Or maybe a strange text message that you haven’t clicked on. Fortunately, there are many organizations out there that have launched efforts aimed at reducing the threat that they pose. In general, these organizations put scam websites on the radar by collecting and sharing information about them. In some cases, they prompt an investigation into the scammers behind the sites.

Related: Learn How to Protect Your Business From Cybercrime

It’s free to report a suspicious website you’ve encountered, and it takes just a minute. Here are eight ways you can report a suspected scam website to stop cyber criminals and protect yourself and others online.

1. The Internet Crime Complaint Center

The IC3, as it is known, is an office of the FBI that receives complaints from those who have been the victims of internet-related crime. The IC3 defines the internet crimes that it addresses to include illegal activity involving websites. Complaints filed with the IC3 are reviewed and researched by trained FBI analysts.

2. Cybersecurity and Infrastructure Security Agency

CISA, which is an agency of the U.S. Department of Homeland Security, targets a wide range of malicious cyber activity. It specifically requests reports on phishing activity utilizing fraudulent websites. Information provided to CISA is shared with the Anti-Phishing Working Group, a non-profit focused on reducing the impact of phishing-related fraud around the world.

3. econsumer.gov

The econsumer.gov site, run by the International Consumer Protection and Enforcement Network, is for reporting international scams. It is supported by consumer protection agencies and related offices in more than 65 countries. A secure version of their site is used by law enforcement agencies to share info on scams.

4. Google Safe Browsing

While Google does not have a mechanism for reporting all varieties of website scams, there is a form for reporting sites that are suspected of being used to carry out phishing. Reports made via the form are managed by Google’s Safe Browsing team. Google’s Transparency Report provides information on the sites that it has determined to be “currently dangerous to visit.”

Related: Is That Instagram Email a Phishing Attack? Now You Can Find Out.

5. PhishTank

This service was founded by Cisco Talos Intelligence Group to “pour sunshine on some of the dark alleys of the Internet.” Phishtank includes an ever-growing list of URLs reported as being involved in phishing scams. To date, it has received more than 7.5 million reports of potential phishing sites. It says that more than 100,000 of the sites are still online.

Related: 6 Ways Better Business Bureau Accreditation Can Boost Your Business

6. Antivirus Apps

Antivirus providers such as Norton, Kaspersky, and McAfee have forms that can be used to identify pages that users feel should be blocked. Scam sites would definitely fall under that category. With some antivirus platforms, reporting forms can only be accessed by registered users. Norton’s is open to anyone.

7. Web host

There is a chance that the DNS service hosting the scam site will take action to shut it down. There are a variety of online resources that can help you to find the DNS of a particular site. Once you identify it, send a message to their customer service reporting the site in question and the experience that you had.

8. Share your experience on social media

This is actually more like sounding an alarm than filing a report, but it might protect one of your connections who stumbles upon the same site or is targeted by the same type of scam. At the very least, it could draw attention to the fact that scam sites affect real people. A post on Facebook about a close call you had with a scam might better equip your network to avoid any dangerous entanglements. If it does, they’ll thank you.

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LastPass hacked, OpenAI opens access to ChatGPT, and Kanye gets suspended from Twitter (again) • TechCrunch

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Aaaaand we’re back! With our Thanksgiving mini-hiatus behind us, it’s time for another edition of Week in Review — the newsletter where we quickly wrap up the most read TechCrunch stories from the past seven(ish) days. No matter how busy you are, it should give you a pretty good idea of what people were talking about in tech this week.

Want it in your inbox every Saturday morning? Sign up here.

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Instafest goes instaviral: You’ve probably been to a great music festival before. But have you been to one made just for you? Probably not. Instafest, a web app that went super viral this week, helps you daydream about what that festival might look like. Sign in with your Spotify credentials and it’ll generate a promo poster for a pretend festival based on your listening habits.

LastPass breached (again): “Password manager LastPass said it’s investigating a security incident after its systems were compromised for the second time this year,” writes Zack Whittaker. Investigations are still underway, which unfortunately means it’s not super clear what (and whose) data might’ve been accessed.

ChatGPT opens up: This week, OpenAI widely opened up access to ChatGPT, which lets you interact with their new language-generation AI through a simple chat-style interface. In other words, it lets you generate (sometimes scarily well-written) passages of text by chatting with a robot. Darrell used it to instantly write the Pokémon cheat sheet he’s always wanted.

AWS re:Invents: This week, Amazon Web Services hosted its annual re:Invent conference, where the company shows off what’s next for the cloud computing platform that powers a massive chunk of the internet. This year’s highlights? A low-code tool for serverless apps, a pledge to give AWS customers control over where in the world their data is stored (to help navigate increasingly complicated government policies), and a tool to run “city-sized simulations” in the cloud.

Twitter suspends Kanye (again): “Elon Musk has suspended Kanye West’s (aka Ye) Twitter account after the latter posted antisemitic tweets and violated the platform’s rules,” writes Ivan Mehta.

Spotify Wraps it up: Each year in December, Spotify ships “Wrapped” — an interactive feature that takes your Spotify listening data for the year and presents it in a super visual way. This year it’s got the straightforward stuff like how many minutes you streamed, but it’s also branching out with ideas like “listening personalities” — a Myers-Briggs-inspired system that puts each user into one of 16 camps, like “the Adventurer” or “the Replayer.”

DoorDash layoffs: I was hoping to go a week without a layoffs story cracking the list. Alas, DoorDash confirmed this week that it’s laying off 1,250 people, with CEO Tony Xu explaining that they hired too quickly during the pandemic.

Salesforce co-CEO steps down: “In one week last December, [Bret Taylor] was named board chair at Twitter and co-CEO at Salesforce,” writes Ron Miller. “One year later, he doesn’t have either job.” Taylor says he has “decided to return to [his] entrepreneurial roots.”

audio roundup

I expected things to be a little quiet in TC Podcast land last week because of the holiday, but we somehow still had great shows! Ron Miller and Rita Liao joined Darrell Etherington on The TechCrunch Podcast to talk about the departure of Salesforce’s co-CEO and China’s “great wall of porn”; Team Chain Reaction shared an interview with Nikil Viswanathan, CEO of web3 development platform Alchemy; and the ever-lovely Equity crew talked about everything from Sam Bankman-Fried’s wild interview at DealBook to why all three of the co-founders at financing startup Pipe stepped down simultaneously.

TechCrunch+

What lies behind the TC+ members-only paywall? Here’s what TC+ members were reading most this week:

Lessons for raising $10M without giving up a board seat: Reclaim.ai has raised $10 million over the last two years, all “without giving up a single board seat.” How? Reclaim.ai co-founder Henry Shapiro shares his insights.

Consultants are the new nontraditional VC: “Why are so many consultant-led venture capital funds launching now?” asks Rebecca Szkutak.

Fundraising in times of greater VC scrutiny: “Founders may be discouraged in this environment, but they need to remember that they have ‘currency,’ too,” writes DocSend co-founder and former CEO Russ Heddleston.

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Building global, scalable metaverse applications

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Previously we talked about the trillion-dollar infrastructure opportunity that comes with building the metaverse — and it is indeed very large. But what about the applications that will run on top of this new infrastructure?

Metaverse applications will be very different from the traditional web or mobile apps that we are used to today. For one, they will be much more immersive and interactive, blurring the lines between the virtual and physical worlds. And because of the distributed nature of the metaverse, they will also need to be able to scale globally — something that has never been done before at this level.

In this article, we will take a developer’s perspective and explore what it will take to build global, scalable metaverse applications.

As you are aware, the metaverse will work very differently from the web or mobile apps we have today. For one, it is distributed, meaning there is no central server that controls everything. This has a number of implications for developers:

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  • They will need to be able to deal with data that is spread out across many different servers (or “nodes”) in a decentralized manner.
  • They will need to be able to deal with users that are also spread out across many different servers.
  • They will need to be able to deal with the fact that each user may have a different experience of the metaverse, based on their location and the devices they are using due to the fact not everyone has the same tech setup, and this plays a pivotal role in how the metaverse is experienced by each user.

These challenges are not insurmountable, but they do require a different way of thinking about application development. Let’s take a closer look at each one.

Data control and manipulation

In a traditional web or mobile app, all the data is stored on a central server. This makes it easy for developers to query and manipulate that data because everything is in one place.

In a distributed metaverse, however, data is spread out across many different servers. This means that developers will need to find new ways to query and manipulate data that is not centrally located.

One way to do this is through the blockchain itself. This distributed ledger, as you know, is spread out across many different servers and allows developers to query and manipulate data in a decentralized manner.

Another way to deal with the challenge of data is through what is known as “content delivery networks” (CDNs). These are networks of servers that are designed to deliver content to users in a fast and efficient manner.

CDNs are often used to deliver web content, but they can also be used to deliver metaverse content. This is because CDNs are designed to deal with large amounts of data that need to be delivered quickly and efficiently — something that is essential for metaverse applications.

Users and devices

Another challenge that developers will need to face is the fact that users and devices are also spread out across many different servers. This means that developers will need to find ways to deliver content to users in a way that is efficient and effective.

One way to do this is through the use of “mirrors.” Mirrors are copies of the content that are stored on different servers. When a user requests content, they are redirected to the nearest mirror, which helps to improve performance and reduce latency.

When a user’s device is not able to connect to the server that is hosting the content, another way to deliver content is through “proxies.” Proxies are servers that act on behalf of the user’s device and fetch the content from the server that is hosting it.

This can be done in a number of ways, but one common way is through the use of a “reverse proxy.” In this case, the proxy server is located between the user’s device and the server that is hosting the content. The proxy fetches the content from the server and then delivers it to the user’s device.

Location and devices

As we mentioned before, each user’s experience of the metaverse will be different based on their location and the devices they are using. This is because not everyone has the same tech setup, and this plays a pivotal role in how the metaverse is experienced by each user.

For example, someone who is using a virtual reality headset will have a completely different experience than someone who is just using a desktop computer. And someone who is located in Europe will have a different experience than someone who is located in Asia.

Though it may not be obvious why geographical location would play a part in something that is meant to be boundless, think of it this way. The internet is a physical infrastructure that is spread out across the world. And although the metaverse is not bound by the same physical limitations, it still relies on this infrastructure to function.

This means that developers will need to take into account the different geographical locations of their users and devices and design their applications accordingly. They will need to be able to deliver content quickly and efficiently to users all over the world, regardless of their location.

Different geographical locations also have different laws and regulations. This is something that developers will need to be aware of when designing applications for the metaverse. They will need to make sure that their applications are compliant with all applicable laws and regulations.

Application development

Now that we’ve looked at some of the challenges that developers will need to face, let’s take a look at how they can develop metaverse applications. Since the metaverse is virtual, the type of development that is required is different from traditional application development.

The first thing that developers will need to do is to create a “space”. A space is a virtual environment that is used to host applications.

Spaces are created using a variety of different tools, but the most popular tool currently is Unity, a game engine used to create 3D environments.

Once a space has been created, developers will need to populate it with content. This content can be anything from 3D models to audio files.

The next step is to publish the space. This means that the space will be made available to other users, who will be able to access the space through a variety of different devices, including desktop computers, laptops, tablets, and smartphones.

Finally, developers will need to promote their space. This means that they will need to market their space to users.

Getting applications to scale

Since web 3.0 is decentralized, scalability is usually the biggest challenge because traditional servers are almost impossible to use. IPFS is one solution that can help with this problem.

IPFS is a distributed file system used to store and share files. IPFS is similar to BitTorrent, but it is designed to be used for file storage rather than file sharing.

IPFS is a peer-to-peer system, which means that there is no central server. This makes IPFS very scalable because there is no single point of failure.

To use IPFS, developers will need to install it on their computer and add their space to the network. Then, other users will be able to access it.

The bottom line on building global, scalable metaverse applications

To finish off, the technology to build scalable metaverse applications already exists; but a lot of creativity is still required to make it all work together in a user-friendly way. The key is to keep the following concepts in mind:

  • The metaverse is global and decentralized
  • Users will access the metaverse through a variety of devices
  • Location and device management are important
  • Application development is different from traditional development
  • Scalability is a challenge, but IPFS can help

Clearly, we can’t have an article series about building the metaverse without discussing NFTs. In fact, these might be the key to making a global, decentralized, metaverse work. In our next article, we will explore how NFTs can be used in the metaverse.

By keeping these concepts in mind, developers will be able to create metaverse applications that are both user-friendly and scalable.

Daniel Saito is CEO and cofounder of StrongNode

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