Apple Pay and Near Field Communication (NFC)

Until a few days ago NFC, meant National Football Conference to me, but after a little research I learned it also means Near Field Communication, (and Apple’s announcement of Apple Pay)  and it is an exploding field in the Financial and Telecommunication world. You most likely already have Smartcards with “tap” capabilities but more is coming (real soon now).

Apple Pay

An Interesting Product Name and so easily mocked.

What is NFC? Here is a helpful quick explanation on the topic:

Nifty and helpful isn’t it, and it will make your life so much simpler, as well. Apple’s announcement of  Apple Pay™ as part of the iPhone 6.0, so you can use your phone to “tap and pay” (you don’t even need your wallet any more just wander around with your phone), may be a “game changer” in terms of either payment systems or Smartphones (not sure which). Currently you can use your phone to “pay” but it typically uses the “scanner” capability (i.e. throw up a bar code or scatter code on the smartphone screen, and scan it), will folks adopt this new payment system? Given Apple’s ability to market things, my guess is yes, all the Hipsters will be flocking to using Apple Pay™.

The Disney store is adding payment machines that allow you to pay “on the fly” with your NFC-capable payment thing-a-ma-bob, so you can take your trendy iPhone 6.0 and buy some Disney stuff, Yea!!

Isn’t this a wonderful world we live in? Um, no, not for an old grizzled tech geek like me. All I see with this is yet another way to either:

  • Impulse spend without having to think about the consequences (the battle cry of the hipster, cappuccino sipping generation)
  • Another possible security breach that can empty my bank account (or at least put a dent in it)

If you read the Wikipedia page you will see a nice line that states:

Although the communication range of NFC is limited to a few centimeters, NFC alone does not ensure secure communications.

That is one of the kickers to watch. There are lots of really nifty security stuff built into this technology (I am not a complete Luddite, I do realize folks do try to be secure in these products, I just don’t think they do enough), but it is still susceptible to a few common lines of attack, from those desperadoes out there trying to steal your money (without having to have a gun, or even seeing you). Look up “man in the middle attacks” on Google, for a good example.

The peril of losing your phone now is much more severe as well, and equally important, is to have a good password on your phone (so that folks can’t easily borrow it to pay for things).


Updated Tip: Scan those Bills

So one of the first useful tips I wrote about was To Scan All Your Bills, so you didn’t necessarily need to keep paper copies of them.

I still continue to do this, although I do keep paper copies as well, for things that I am sure that the CRA might want to look at if I make claims on my taxes like:

  • Tuition receipts for University and my son’s schooling
  • Utilities bills, as I do claim part of those as business expenses
  • etc.,

The interesting updated idea that I have changed to is that I no longer only save these images on my computer at home (which is being backed up). There are now many different services that offer free off-site backup of files such as:

  • Google drive, which comes with your Gmail account
  • Dropbox which is an app that runs on many devices
  • Outlook has file space for you
  • iCloud from Apple
  • Even Ubuntu One offers some free disk space

I am a little leery to use “the cloud” for this kind of storage, so you might want to encrypt them if you use these services, as you never know who the heck might look at your files from elsewhere.

The interesting part about the scanning of my bills was that I did exactly that when I was asked for receipts from the CRA, and I sent them scans of the documents in question, and they seemed happy enough with that. My guess is if it was an actual audit, they would want to see the originals, but for a “request for receipts” the government seems happy enough with a scanned image now as well.

Unfortunately you need to keep your paper records for a while before you can safely dispose of them (i.e. shred and/or burn), but maybe we are finally getting away from paper copies of things?


Trader Terminator

The lovers of Science Fiction already know the perils of allowing machines to do too much in our world (i.e. Skynet and the Terminator series), yet I continue to hear more and more cool ways that automated systems are making our lives better (and will improve overall lifestyle).

Currently many trading systems have automated heuristics out there to deal with situations on the Equities markets. A lot of these are simple rules like, if BCM (a strong equity) goes below $12/share sell or if BCM trends upwards buy (as bad examples), however, thanks to very smart programmers, these rules and systems have become much more complex, and with complexity comes opportunities. I have worked on early “artificial intelligence” systems, but the heuristics these days are quite extraordinary (in my simple understanding of them).

Eniac was at the time the greatest piece of technology, now my digital watch has more computing power than this marvel of technology. Technology always evolves.

The interesting question is, even with really advanced “thinking” systems, will it make things better for me (the individual investor), us (the collective that holds a mutual fund) or we (all investors in general)?

Say I design an automated trading system (call it the XROB2013) which I created using as many cool and exciting algorithms and ideas that I read about and learned from various traders out there (there are very few “secrets” as we have learned form Mr. Snowden). The XROB2013 could be quite an exciting and new way of doing things, if (as the designer) I chose the right algorithms and heuristics to go with, and it would be easy to test it against all the old data from the market to see how our trading system might do (in a test environment).

I launch my XROB2013 Mutual Fund, which uses these algorithms to buy and sell the best stocks to hold (at the time) and for argument sake, we’ll say the axis we worry about is growth (i.e. we’ll ignore dividends and such). If my XROB2013 is successful, suddenly I have many folks wanting to buy shares in the Mutual Fund and the Fund Maxes out and might be declared “best in show” for a while (is best in show a real investing fund award?).

What happens next? Looking into my technology history books, there is no such thing as a secret and since Patent’ing a trading heuristic isn’t likely, there will be “rip offs” of XROB2013 that might appear (that maybe have lower MERs or such, to make them more attractive (it would be cheaper because there was no R&D, it was simply a rip off)). Suddenly XROB2013 loses its lustre for a lot of investors, and worse still the algorithms now are working against each other creating an orthogonal change in trading ideas, so the XROB2013 rules would need to be changed or there might be further erosion of the value of the Mutual Fund.

All of this to say, that no matter how great an automated trading/investing system anyone puts together, the market ends up finding ways to lower the impact of any new idea in a very short time and going back to a relative level of stasis. Don’t be enticed by claims of “the next big thing” in market trading, unless you are sure it’s going to work.

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Investing and System Backups the same?

That is my premise, that if you do back up your computers and such, it is much like investing your money in the market. I know you are thinking maybe I had an odd weekend, and I have gone off my financial nut here? I may have but allow me to elaborate on this a little.

Backups for your system are great ideas and very important to do (as I mentioned last week), however, if you cannot restore the data from these backups it ends up being a futile procedure. Mrs. Michael James had this very issue arise, where she was told all of her data was being backed up, however, when her system failed, the I.T. group sheepishly pointed out that they couldn’t restore her data from the backup tapes that they had. You really do need to test your backups to make sure that you can use the data in the backup data archive.

Now This is a Real Back Up Tape (9 Track Reel)

Now This is a Real Back Up Tape (9 Track Reel)

Investing your money is always interesting, you diligently put your money away in Index Funds, Stocks or maybe you have money in Stock Options and many folks speak of how much money they have by quoting the value of their Stock or Investment Holdings, however, until you have that in Cash (or available to you to buy a Chocolate Bar, say) you really have nothing.

Yes I know, if your money is in an Index Fund, GICs or Bonds the chance that their value will disappear is miniscule, but how about those Stocks? Do you know how many Millionaires (on paper) that I knew at Nortel, that are still working now (and have incredibly large debt loads, or were forced to declare bankruptcy)? Far too many.

If you are quoting your “wealth” by Stock Options from your firm, you are living in a fool’s paradise. Until you cash those options in, you have nothing. Yes, many people have become rich on Stock Options, however, many folks have assumed their wealth without cashing their options, and seen their wealth evaporate like a fart in the wind.

The bottom line for both is simple: ” Backups are only successful when you actually Restore the data from them and similarly Investing is only successful once you get the money out of it (and start living on it)”

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Systems and Failures

Over the past day or so I have spent a fair amount of time piecing back together my home computer system (at least one of them, I have a veritable cornucopia of systems). This system is very important in that it is the center of my computing universe, in that it holds a great deal of important data, so after resurrecting the system I will dole out a little bit of home spun home computing advice.

This is ENIAC the Computer My Dad Programmed. Backups? On this?

First and foremost, ensure you have backups of your data and your system. This is crucial to any and all of your systems, if you don’t have backups (and hopefully they can restore as well) you will have to rebuild a dead system from scratch (and lose your personal settings).

  • Back up your system image onto another disk, on your system (preferably external, but not on the same disk as your operating system is on). Make sure your backups are working as well (check your logs).
  • If you have important data, back this information up or make it safe in some fashion. Copy the data onto another disk, another system, onto a network server or have a home Network Access Storage box (NAS). Make sure your back ups are secure, but again, make sure this back up is running as well.

Create an operating system rescue disk (depending on what OS you are running) or keep the original Operating System disks you used to install the system (or the ones that came when you bought the system). These are essential in repairing your system as well. If you threw these out, you will need to find them or recreate them (or simply buy a new system).

Have all the Serial Numbers for your: Operating System, Anti Virus System, and all Software that you bought. These are essential as well if you have to recover after a partial system failure (yes this happens as well).

Ensure your system is running System Optimization is running to defragment your disks and check for errors as well.

Finally, maybe what you need is a Guy (or Gal) who really loves futzing around with technology that can come over and help you set all of this up. I used to be “the Guy” for a few people in terms of helping them with technology, but I think now I am mostly just “the Guy” for my family’s computers, but that is fine as well.