Habits of self made millionaires you NEED to know

“Your habits are the reason why you’re rich or poor,” says Tom Corley, author of Rich Habits: The Daily Success Habits of Wealthy Individuals. “In fact, it’s often two or three habits that separate the wealthy from those who are financially challenged.”

Corley studied millionaires for 12 years, and concluded these seven habits are critical to success to become a self-made millionaire.

They Read

Corley states reading is the number one habit to adopt if you want to become wealthy. According to his study, 85% of millionaires read two or more books a month. But its not just any books its books that help them grow intellectually. Self improvement books, psychology, business, economics and true stories of other successful people.

“The key to success in life is growing your knowledge base and skills,” says Corley. “Devote 30 minutes or more each day to learning by reading books. If you do, it will set you apart from the competition, as most people do not read.”

They find mentors

Ninety-three percent of self-made millionaires in Corley’s study point to mentor for the reason to their success.

“Finding a success mentor in life is one of the least painful ways to become rich,” says Corley. “It can put you on the fast track to success.”

Corley come in many types. It could be family member, a teacher, a senior member at work or even a book. Mentors do not have to be real relationships, I have learnt from from the likes of Dale Carnegie, Robert Kiyosaki and Sun Tzu than tI have learnt from any teacher. There is a final type of mentor and I find this the most interesting type of mentor that Corey found was “you”.

Yourself. Also called “the school of hard knocks,” you can mentor yourself by learning from your own mistakes. It’s the hardest because it requires lots of self reliance, mental resilience and lots of time and sometimes money. Despite its difficult its also the most powerful since the lessons you learn have a strong emotional component. It’s hard to make the same mistakes twice when they cost you a significant loss.

They make and follow through plans

Millionaires do something that Corley calls “dream setting”. They think of dreams as a ladder, and the rungs are your specific goals and actions. Millionaires break their goals down into actions that make up their to-do list. It forces them to ask the right questions and develop realistic plans about how they will get to the next phase and then implement them.

They create multiple passive income streams

Self-made millionaires do not rely on only a single source of income, says Corley. Instead, they develop multiple streams, and most have at least three. Income alone will rarely make anyone rich, its important to develop streams of passive income. That is, income where you do not sacrifice time to make it. For example investing!

“Sixty-five percent had three or more streams of income that they created over time,” he says. “Diversifying your sources of income allows you to weather the economic downturns that always occur in life.”

They Avoid Time Wasters

Millionaires know money can be recouped, but the bigger risk is wasting time. You can’t get time back. Time is the only resource that is constantly declining. We all have the same 24 hours in the day its up to you how you spend it.

Sixty-seven percent of the self-made millionaires in Corley’s study watch less than an hour of TV each day, and 63% spent less than an hour a day on the Internet in activities such as Facebook or watching YouTube videos.

If you don’t make money from social media then I would delete it. When I quit social media I read more books in 1 month than I had read in the previous year. These books were essential for me to crush bad habits, build mental resilience and expand my business knowledge.

Exercise

“Seventy-six percent of the rich aerobically exercise 30 minutes or more every day,” Corley said. Aerobic exercise includes anything cardio-focused, such as running, jogging, walking, or biking.

Cardio is good for the body and the brain. Corley argues that “Exercise also increases the production of glucose. Glucose is brain fuel. The more fuel you feed your brain, the more it grows and the smarter you become.”

Even walking just 30 minutes a day has life changing impacts.

They seek out likeminded people

“The rich are always on the lookout for individuals who are goal-oriented, optimistic, enthusiastic, and who have an overall positive mental outlook.”

It’s equally important to avoid negative people and influences, Corley said, emphasizing that “negative, destructive criticism will derail you from pursing success.”

They’re Early birds

“Early to bed, early to rise makes a man healthy, wealthy and wise” says Benjiman Franklin and it seems like it’s true. Nearly 50% of millionaire get up 3 hours before the work day.

But this doesn’t mean sleeping less. 89% of the self-made millionaires reported sleeping seven or more hours every night. Sleep does work behind the scenes, its crucial for cognitive development and memory formation.

If you struggle to sleep beyond the average of 7 minutes you can improve your “sleep hygiene” and drastically cut down the amount of time you spend trying to sleep

They don’t go follow the herd

Corley argues “failure to separate yourself from the herd is why most people never achieve success.”

In a world addicted to their phones it those who go practice digital minimalism who are able to use their time better and get ahead in life. In a world trending towards increased specialisation, its generalists who get ahead

In a world where businesses are obsessed with emotional intelligence, Amazon is the most valuable the company on the planet. If you are unfamiliar with Amazon’s organisational culture it can best be described as dog eat dog Machiavellian jungle.

They seek feedback

People are terrified of negative criticism but it can often be the most helpful way to improve yourself. Without feedback you are just stabbing in the dark at success. Wit feedback you have light, you have the necessarily information to succeed in life. Don’t be afraid to get your feelings hurt. As Marcus Aurelius wrote in The Meditations “You have power over your mind – not outside events. Realise this, and you will find strength.”

Conclusion

To conclude it is clear for Corley’s research that there are habits you can develop to become financially successful but it’s important not to stretch yourself. You do not need to develop all of these habits all at once. I recommend spend a few months just reading as many self improvement books as you can, if you feel stretched for time, change your priorities and eliminate distractions. Success isn’t about doing extraordinary things it’s about doing extra ordinary things consistently.

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Thomas Cook: what went wrong?

Thomas Cook founded in 1841 collapsed on September 23rd after a decade of financial troubles. Up till recently the company looked likely to escape bankruptcy, having agreed on a rescue deal last month. The Chinese conglomerate Fosun was keen to deploy the Thomas Cook brand in Asia, and the company’s lenders, were going to inject £900m into the firm. Fosun was also keen to sell off Condor, its profitable airline in Germany, which has managed to avoid bankruptcy.

But in September the firm’s main banks threatened to withdraw their support if the group was not able to find an extra £200m in financing, which they calculated it would need to see it through the more difficult winter months. None of its other backer, Fosun, the banks, bondholders or hedge fundswere, prepared to invest anymore. A last-minute appeal for a government bail-out was rejected much to the dismay of many in the Labour Party.

The company has earned most of its revenue since the 1990s selling package holidays, which include various combinations of flights, accommodation and food in one, usually lower, price. Industry experts say that this is because Thomas Cook is able to use their scale to negotiate lower prices when booking flights and hotels.

Thomas Cook’s collapse is not a sign that package holidays are in decline in fact the industry is enjoying resurgence. Around half of Britons’ trips abroad are package deals, according to the Association of British Travel Agents. The number of Britons going abroad on “inclusive tours” has risen from 14.3m in 2010 to 18 last year. It’s still cheaper to buy a group holiday as a package than purchase the parts separately. The young holidaymaker market is growing particularly fast. Many travel agents attribute this to the popularity of “Love Island”, a reality show featuring attractive young adults are their drunken sexual exploits on telly for all to see.

So what happened to Thomas Cook?

One factor is being undercut by rivals. New travel websites, such as Expedia, allow holiday makers to book their own flights and accommodation. And the rise of low-cost airlines, many of which refuse to sell their tickets via travel agents, have lured their customers away from their 550 high street branches, which were expensive to shut down.

Thomas Cook also faced competition from internet companies. New online-only travel agents, such as On the Beach and We Love Holidays easily undercut Thomas Cook on price. They are now Britain’s fourth- and fifth-biggest package-holiday operators.

Another reason by the company is Brexit. The company and other industry analysts claim Brexit has knocked consumer confidence and the depreciation of Sterling has discouraged Brits from popping off abroad for a holiday of cheap pints in the sun.

But ultimately Thomas Cook’s own poor business decisions that are to blame for its demise.

The firm inherited too much debt when it merged with MyTravel Group, a rival package-holiday firm, in 2007. Another series of poorly planned Mergers and Acquisitions added to the debts. The company could never shake off this debt, which had reached £1.9bn by March 2019.

Thomas Cook made a risky bet on Tunisia as a destination just before a string of terrorist attacks shut down the country’s industry.  The big losers are the 600,000 odd holidaymakers currently travelling with Thomas Cook. Britain’s Civil Aviation Authority have had to make plans to repatriate at least 150,000 of the holidaymakers now abandoned abroad. German authorities are organising an even bigger operation to bring home over 300,000 travellers.

Arguably the big winner is TUI, now Britain’s biggest tour operator, which sees its closest rival knocked out of the market. But there’s no reason TUI won’t struggle to fight off competition, from low-cost and online travel companies. The market certainly isn’t confident given that TUI’s shares have already fallen by 40% over the past years.

With margins on flights squeezed by competition, they are aiming to increase their profits by turning their websites into one-stop holiday shops.  Kenny Jacobs, Ryanair’s chief marketing officer, wants its website to become the “Amazon of travel”, selling hotel rooms, car hire and even airline tickets for its rivals. a sign that its prospects have become much less sunny.

Why I’m bullish on Baidu

Baidu. The most popular search engine in what will soon be the world’s biggest economy. It has over a billion monthly active users and another 275 million that have DuerOS voice assistant (the Chinese equivalent of Siri). And great news. It’s undervalued!

The following report should not be taken as investment advice. It’s my opinion on a stock that I own and will continue to buy.

Baidu is fundamentally strong for many reasons:

It’s a founder led company: Robin who created the company in 2000 still serves as CEO and maintains a large share of the company.  Founder companies are often said to have an advantage as they usually prioritise sustainable long-term growth over short term profits. Founder CEOs usually also have significant skin in the game.

They’re expanding into growing markets: In 2017, he announced that the business would begin to shift its business operations from search engine advertising to driverless vehicles and artificial intelligence. 

Baidu has had a few bad months and it’s still holding up well: Baidu currently trades at $103, down from a high of over $270 from June 2018.  Current price/earnings is 15.75 which is not far off the 16.5 Shanghai Stock Exchange average.

Year on year growth: Baidu published a net income of $3.3 billion in 2018, compared to $2.6 billion in 2017 and $1.7 billion in 2016.

Demographic trends suggest China will begin democratisation soon: According my calculations based on demographic analysis and expert opinions China will begin to undergo democratisation in the mid-2020s which will open a whole new universe of opportunities Internet censorship laws for a search engine are about as helpful as tobacco regulations for cigarette companies. China’s Democratisation process will not ignore the internet in a digital age and after online censorship is rolled back Baidu will experience much more usage and ad revenue will explode.

Strong balance sheet: Total assets minus total liabilities yields $26 billion, which is indicative of a strong balance sheet. With a solid current ratio of 2.61 and $4 billion in cash at present, the company is well poised to make moves into emerging industries

Cheap stock: With an enterprise value of $38 billion and a EBITDA of $4.6 billion in 2018, Baidu has a 8.26 EV/EBITDA.  You don’t typically see a ratio this low for such a large technology company. For example, Google has a 13.80 ratio and apple has 13.44 ratio.

Baidu has diversification: the company holds a 70% stake in iQiyi, AKA the “Netflix of China.”  Revenue from this business currently makes up around a quarter of their revenue.  And whilst Baidu’s advertising revenues are slowing, iQiyi revenue has been steadily growing over the past couple at around 30%.    

It’s not all rosy in the short term which makes it attractive to long term punter who are willing to wait for big pay offs. The current sentiment is bearish

The trade war has knocked investors’ confidence in buying Chinese equities. the trade war is something that cannot last forever that benefits investors who are willing to back a dark horse.  The difficulties Baidu is dealing with in a rapidly changing tech environment are most likely temporary hurdles than something that will permanently hinder the business.

Baidu did have a big sell-off after releasing Q1 2019 results that revealed a net loss of $49 million, compared to a $670 million gain just a year earlier. But it’s not as bad as it looks as much of this loss can be attributed to a one off large expenditure on the CCTV New Year Eve Gala. This was a one-time sponsorship that cost the company around $50 million, $1 million more than it lost in the first quarter.

Baidu states in its 2019 guidance that it expects little to no sales growth in Q2 2019. Additionally, analysts predict that profits could sink by up to 60% in 2019 and take till 2022 to recover to 2018 levels. Analysing the company’s cash flows, we can see that Baidu posted $4 billion in 2017 and $3.9 billion in 2018. This decrease can be largely attributed to the fact capital expenditures were significantly higher compared to previous years.

 In summary  

It’s important to consider Baidu is undergoing a major shift in operations, and it has shown in the short-term financial results. The Q1 loss and the trade war has emboldened already bearish sentiment about the big moves the company is making.

Assuming that analyst consensus is correct, and 2019 will be a poor year but Baidu will survive.  I believe the company will bounce back to the $4 billion range by 2022 and thrive in the mid 2020s when democratisation starts regardless of current obstacles.

Trolley wars

Budget supermarket Lidl has reached a 5.9% share of the UK grocery market after sales increased 7.7% in just three months to 11th August 2019. Since entering the UK market in 1994 the company has made converts out of critics. Historically shopping was akin to leisure for the British, it wasn’t an in and out operation like in Germany. If people could afford to splash out on branded goods, then they probably would. Following the rise of the German retailers Lidl and Aldi, British attitudes to retail are changing. There is much less stigma when it comes to budget supermarkets. Lidl and Aldi now attract people from all tax brackets whereas before budget retailers were being for people who couldn’t afford to go elsewhere.

Tesco remains the UK market leader with 27% of the market but the company is shrinking along with the rest of the big four. To beat Aldi or Lidl without drastically changing their business, Tesco has launched a budget retailer. The new chain, called Jack’s will be headed by Lawrence Harvey, the former Aldi UK executive and currently has 9 stores across Britain.

The change in strategy is the boldest move yet by the head executive. Dave Lewis took over the firm in 2014 and stirred it back to big profits after inheriting £250 million in missing money. Profits are back to over a billion. That’s not the only big move Tesco has made.

The company have recently formed an alliance with Carrefour, Europe’s biggest retailer. The strategic partnership with Carrefour was an effort to get better prices through increased purchasing power in a very competitive retail environment. The move will become operational in October.

Laith Khalaf, a senior analyst at Hargreaves Lansdown says, “The latest Tesco partnership looks like a direct response to the threat posed by the proposed merger of Sainsbury’s and Asda, who will have access to the global buying power of Walmart as a result.” The merger was eventually blocked by the Competition and Markets Authority but if it had been successful then it would have overtaken Tesco as the biggest UK retailer.

Patrick O’Brien, UK retail expert at GlobalData says the move is also an attempt “to reduce prices on own-brand products, and this is more of a direct response to Aldi and Lidl, whose offers are heavily weighted towards own-brand”. In all shops across the UK own brands are on the rise. Own brands have much cheaper because there’s no marketing costs involved. Previously own brands were stigmatised as low quality especially during the horse meat scandal, but German Retailers have helped subdued these attitudes.

Whether Jack’s will be a success or be seen as a inferior imitator is too early to tell but what is clear is that UK Retail is getting even more competitive.

Viable systems Model explained

Viable Systems Model explained

The VSM is a management technique for understanding variability and how complex organisations react to them

But it gets a little bit more complicated than that

Variety is the number of potentialities and a system needs to be variable to be able to handle variety. For example the brain must be complex to regulate the body; as an organisation has to be complex to manage its many operations.

Organisations have a variety of relationships existing between the different components of said organisation. Organisations need to have a constant sense of identity and purpose – known as being Purposive. Organisational purposes allow organisations to adapt to change and recreate these relationships to achieve the purpose.  This is the principle of autopoiesis – meaning “self creation or self-production.

Hierarchy and structure

Hierarchy exists in organisation, but it must be viable for the organisation to function.

There are underlying structures which keep the purpose viable and this is what makes up the VSM

Environment has more variety than operations and operations have more variety than management. In other words the management of operations is less variable than the actual operations.

Ashby’s law of requisite variety: Variety absorbs variety

Control can be obtained only if the variety of the controller is as good as the variety of the situation being controlled

Means of control

Senior Management’s method of control is derived from resources

Operational levels carry out tasks in exchange for capital and manpower AKA a resource bargain

Operational Management is therefore accountable for their operations to senior management

Accountability is an effective actuator of variety

Senior Management should regulate not an intrusive one

Systems within VSM

System 1 – Implementation (Start of the supply chain, iron ore I the steel industry)

System 2 – Coordination – the centre designed to coordinate all operations in system 1

System 3 – Control – represents all structures put in place by system 2/ senior management to dictate rules, rights and resources within system 1. It is the link from the lower levels of the business to the senor levels.

System 4 – intelligence – is responsible for analysing the external environment. Intelligence is used by businesses to analyse and adapt

System 5 – policy is the organisation ethos. It is the system that steers the organisation and is responsible for balancing the demands between all the different areas

Beer’s Principles of Organisation

Principle 1

Organisations should aim for the most efficient way to establish variety without making drastic changes to the organisation or to people’s freedom

Principle 2

The four directional channels must be able to maintain pace with variety otherwise variety will pose a risk to the organisations

Principle 3

When information relating to a variety crosses a channel it undergoes “transduction” as different areas have different lingos. Each transduction must be equivalent to the channel. For example, customer service people can talk to people out on the field, but CEOs and plumbers have a very different lingo for work

Principle 4

The three principles must be maintained without delay. Because business does not operate in quarters in Realtime managerial processes must be constant to keep up with the changing environment

Axioms of management

“First Axiom: the sum of horizontal variety disposed by operations elements equals the sum of vertical variety disposed on the six vertical components of corporate cohesion” To put it simply the excess variety transferred from environment to ops must be controlled by an organisation through system. Variety from uncontrollable sources is dangerous.

“Second Axiom : the variety disposed by system three resulting from the operation of the first axiom equals the variety disposed by system four” Basically 3 and 4 must be in balance intelligence and control in organisations must reflect each other because control influences operations it must keep up with the ongoing sin the environment from intelligence. Organisations with a poor system 4 leave organisations no well adapted to the environment

“Third axiom: The variety disposed by system five equal s to residual variety generated by the operation of the 2nd axiom” Essentially system 5 must adapt to the excess variety between system 2 and 3, coordination and intelligence.

Algedonic signals

All systems have processes for unbalances between two connections

Signals between implementation and control should be monitored constantly as that is the bridge between what the senior management want and what employees are doing

If an emergency occurs, it will be sent to Policy which then will request corrective action from intelligence and control

Implementation then corrects errors before waking up control and it also prevents unnecessary intrusions from control into implementation

Thus, achieving a balance between centralisation, decentralisation, freedom and effectiveness

Beer described the VSM as an insight machine and Others have described the VSM as a paradigm shifter because of its validity and practical use. Although his theory is complex, the VSM nevertheless provides a framework according to which non-mathematicians can understand systems and gain insight of hwo to manage them better.

VSM offers a framework for getting vital information on systems functioning, aimed at ensuring the viability of systems. It uses variety measures to allow the system to respond to challenges in a balanced and nuanced way.

Capitalism in crisis and the role the business community and nation states must play

Western Capitalism is not working as well as it should. Growth is sluggish, inequality is rampant and people are more politically divided than ever before. Trust in the media, politicians and banks is at an all time low and populists that are more likely to exacerbate these issues are in power. But populists like Donald Trump are more of a symptom of the problem than the problem itself. Capitalism is not working and in an age when multinationals are more powerful than governments, it may be corporations that lead the change.

In consumer capitalism, the customer is always right and a growing number of customers are expecting more from big business. They want sustainable, organic and ethically sourced goods and they’re willing to pay for it. It’s not just supply chain mangers that have to adapt to new demands. Public relations teams are getting increasingly political.

Younger consumers are eager for their favourite brands to take stances on social issues evidenced by the new wave of politically inspired advertising. It’s not just the usual suspects like Benny and Jerry’s, big corporations like Nike and Gillette have made the headlines with their recent adverts.

Employees too are demanding more. They want more than a pay check in employment they want purpose. Millennial are the first generation who prioritise purpose at work rather than just money

Just recently Wal-Mart, JP Morgan and Chase pledged their firms purpose was no longer solely to serve their shareholders but their other stakeholders as well. The announcements may be tactical, in a hyper informed world CEOs must at least try to appear as if they are in the business of more than increasing shareholder value. But it’s not just consumers that want to see a friendly face to capitalism even investing; a traditionally cold hearted rational pursuit is experiencing new ethical demands.

There has been a rise of ethical investing online and polls that indicate many more would invest if they felt they were making the world a better place as well as themselves richer. Companies are increasing their Corporate Social Responsibility. This growth is not as fast as PR, which is arguably indicative that the growth of social responsibility may be akin more to green washing than a move towards social responsibility.

The reality is we can only expect companies to be social responsible up to a point. Breaking into ethically grey areas is often a cost effective means to keep prices competitive and failing to stay competitive could mean a business goes under hence the need for regulations.

But businesses need to shape up as well. Consumers want more responsible business, but not more green washing and empty PR campaigns. Even crap companies have mission statements and if organisations want to succeed in a modern world then they’re going to have to get on board with growing demands.  If businesses are to be responsible, then it needs responsible government to regulate it. Governments need to work with each other to prevent international organisations flouting regulations, dodging taxes and from exploiting LEDCs.  Anti Trust laws must be protected for the sake of the consumer and the worker.

Snowbalisation: the beginning of the end

After years of growth global supply chains have not just stopped growing but are actually shrinking In the 90s, a booming time for globalisation, the idea that global supply chains had become flat was considered gospel but in recent years the tide is beginning to turn.

Baker Mackenzie an American consultancy interviewed 600 Asia based TNCs and found nearly half are considering major changes to their supply chain. A tenth are considering a complete overhaul. One reoccurring theme is a change in the role china plays in the global market.

It is now clear that long international supply chains making goods cheaper is not without its disadvantages.  Most TNCs do not know their supplier’s suppliers which is a situation that is hardly secure considering they could be held hostage if a supplier fails to meet its obligations

Shocks to supply chains can come in a variety of shapes and sizes. Following the Japanese tsunami in 2011, a global semiconductor tried to map its vulnerabilities to 3rd and 4th tier suppliers. It took a team o 100 executives over a year to work out who was in their extended murky supply chain.

Secondly what is clear is that global trade consist not just of goods but services as well, call centres in India for example. Services create a third of value going into manufactured goods and services are growing 60% faster than manufactured goods. As services are usually best carried out closer to consumers, it’s possible in the future many firms will be more likely to source closer to home.

Thirdly we have seen that a stretched supply chain is vulnerable to political uncertainty and economic sanctions. More recently the rise of populism has disrupted global supply chains for example many firms are threatening to pull of out of Britain in the wake of Brexit. Globalisation is not going down without a fight. The Charted Institute of Procurement and Supply indicated that 1/5 of continental businesses would demand a substantial discount for even a one day delay at the border. A shocking 1/10 indicated they would cancel the contracts outright. In a fast paced consumer world, time is everything.

Meanwhile across the pond American firms have already experienced the bite of Trumps Tariffs. Despite the truce agreed with Mr. Xi, Trump’s tariffs have remained in place and Huweii’s future is uncertain. And in short a full blown trade war is not off the cards. Moody’s credit agency estimated such a conflagration, would cut real GDP growth in America 1.8% and reduce growth rates across Asia by 1% at least.  And in a globalised world it will be everyone who suffers economically. The OECD predicts a trade war would take 600 billion of global growth by 2021

A recent survey of European firms by Credit Suisse showed an increasing tendency to locate investments in Europe not outside Europe, despite the potential departure of the UK, one of its biggest markets. The findings stated that firms are no longer planning supply chains predominately based on cost. Apple has reportedly asked its suppliers to see how much it would cost to move 15% -30% of its manufacturing from China to South East Asia and India.

Previously technology enabled globalised supply chains but this time it may begin to localise them. It’s likely that to make up for the rapid change in supply chains that technology will be increasingly integrated into the way businesses plan, source, make and deliver.

AI, predictive analytics and robotics are already revolutionising businesses at every level and the general consensus is there is much more progress in the pipeline. Some may call those who dream of nearly 100% automated supply chain overly optimistic, but with rapid progress in new technologies and Moore’s law, it’s far from impossible. Whatever your stance on globalisation, for businesses, one thing is clear. If supply chains have to get shorter they’ll have to get faster and smarter as well.

Energy is about to change forever and it’s not what you think

There’s a huge problem with renewables

It’s called Curtailment and to put it simply it’s when we produce too much wind or solar at certain times of the day and we have to just shut it down. Texas ¼ of energy is produced by wind but when curtailment happens the wind power shuts down and Texas has to use non renewable like natural gas power plants.

The problem is the energy produced cannot be stored as the batteries to store them are too expensive and battery prices need to half in price just to be competitive with natural gas plants. Currently less than 1/10 of 1% of global energy spends any time in batteries.

But consider the experience curve, the idea that as a company produces more units, the individual cost per unit becomes cheaper. The experience curve happens for a few reasons

  • As workers make more of a product they become more efficient at making them
  • Production processes become standardised to be as efficient as possible
  • Products can become specialised to fit specific needs (Different types for industrial, transport, consumer markets)
  • Better use of technology as a result of automation
  • Products are redesigned and improved due to consumer feedback

The more we use solar panels the better we get and making them. Every time the amount of solar panels double the cost reduces 28%. Solar energy is now the cheapest energy in the world and it’s only going to get cheaper. What’s even better is the same thing is happening with batteries.

Growing demand for electric cars and electric storage is making battery production cheaper and battery price has dropped 80% in the last decade alone and renewable energy stored in batteries is becoming increasingly economically viable.

In some places it’s already happening. The Hawaiian rainforest island Kauai, they have already swapped fossil fuel power for solar plus batteries, significantly reducing the carbon footprint of the island and the cost of energy from 15.5 cents to 13.9 cents per KwH. The Hawaiian installation is Tesla’s third project. Elon Musk’s company has previously installed a solar panel and battery grid on the American Samoan island of Ta’u, as well as a battery farm in California in 2017.

Tesla’s founder says his newly built gig factory will single handily double global supply of batteries. Musk is not alone he is in an arms race with Chinese companies who claim they will build capacity for 3 giga factories by 2021. With Samsung and other big names are joining in, the race is getting more and more competitive. There are also other technologies like silicon anodes, solid state batteries and lithium air that could skip us ahead on the experience curve by more than a decade. These developments could make battery powered ships, trains and even airplanes possible.

Also…

It’s not just Tesla that are changing the world we live in. Green start up companies like Ripple and Hyperloop Poland raising money on Seedrs.com and if you invest £150 within 30 days using this link you will get £25 in investment credit.

The problem with Fusion energy

Fusion is the joining of two nuclei to make a single heavier nucleus and it also produces some leftover energy in the process.

It is the opposite of fission which comes from splitting an atom and is used to power nuclear plants. Fusion occurs constantly on our sun, which produces most of its energy via the nuclear fusion of hydrogen into helium.

Fusion energy has two advantages over fission energy which is what we currently use in nuclear power. Fusion doesn’t lead to run off chain reactions the way fission can, so there’s no need to worry about nuclear meltdowns. Another benefit of fusion reactions is that it doesn’t produce the large amounts of dangerous radioactive waste that fission reactions do.

But unfortunately for fusion to occur on Earth, you need a temperature of at least 100 million degrees Celsius. The amount of energy you would need to put in to produce that kind of heat or pressure is much, much higher than what you get out in usable energy.

To have fusion on earth we need cold fusion, a term used to describe the hope that fusion reactions can occur at relatively low temperatures. The idea of cold fusion was once a mere pipe dream, the field was largely written off as pseudoscience the late 1980s.

That all changed when Stanley Pons and Martin Fleischmann reported that their room-temperature electrolysis experiment had produced so much heat and nuclear by-products like tritium that the only explanation was a nuclear reaction. Pons and Fleischmann’s results led to a new wave of cold-fusion experimenting, but no one was able to replicate their heat anomaly. A Department of Energy review later debunked the evidence.

But scientists are still working on making (hot) fusion a viable energy source. Stewart C. Prager of the Princeton Plasma Physics Laboratory called the process of creating viable energy from fusion “a grand scientific challenge.”. Today, fusion reactions occur in doughnut-shaped chambers called tokamaks where gas is pumped into a vacuum chamber and electricity flows through the doughnut’s hole.

The gas becomes charged, to make a state of matter – one that isn’t liquid, gas, or solid-called plasma. Plasma is an ionized gaseous substance that becomes highly electrically conductive to the point that long-range electric and magnetic fields dominate the behaviour of the matter.That plasma is then locked inside the vacuum chamber by magnetic fields, created by massive magnetic coils,  in order to imitate the pressure of the sun’s core. Waves are fired into the plasma to raise its temperature, and at around 100 million degrees fusion can occur.

Reaction outputs have come a long way in the past few decades—from milliwatts 40 years ago to 16 megawatts today – but it’s not enough to make it a economical source of energy. One barrier to a sustained reaction, aside from the amount of energy needed to reach such high temperatures, is finding a material that can withstand that much heat for more than a few seconds.

Steve Cowley, director of the Culham Centre for Fusion Energy, says more investment is needed to make fussion possible. “It’s expensive research that can only be done at large scales and nobody sees the need right now.” Cowley says for 20 billion dollars he could build you a working reactor but it may pnot be reliable. That said 25 years ago we didn’t even know if we’d be able to make fusion work. Now, the question is whether we can make it affordable. h