2020

Discussion – My goals for 2020

Setting goals is a good way to start the new year. Here are the outline of what I plan for my life in 2020.

Tl; dr;

  • Straighten my finance.
  • Purchase at least 1 more property.
  • Grow emergency fund to 3 months living expense.
  • Write at least 52 blog posts.
  • “Challenge” gather a good deal to present to investors.

First thing’s first….

financial review

Reviewing my current personal financial situation, I think it is in a mess currently, with loans are everywhere and there are no system around them. So for 2020, I want to restructure my finance to have a better interest rate on my loans, better visuals on how the investments are going.

At this moment, my loans are as follow.

Loan Interest Notes
Home loan (now investment) 3.85% fixed 2 years, ending 04/12/2020
Investment loan 4.16% a bit high at the moment, can be lowered to a considerable amount

I’m aiming to have them lowered, considering there may be further rate cut from the RBA going into mid 2020. I would consider fixing the interest if the RBA lowered the cash rate to 0.25.

The good thing from low interest rate is that my cashflow from the properties will be much better and I can save them up to invest in more properties.

Property purchase

property investment

As some of you may know, I want to be a professional investor, concentrated to properties. So in 2020, I will be active to find a suitable property for me to purchase, and looking to renovate it to make some instant equity, as well as structuring it to at least neutral geared after tax.

I have been reading up a lot about the topic. And it is challenging to not fall into “paralysis by analysis” syndrome. Basically it means that researching too much leads you to the state where you see risks everywhere and do not start taking action.

By leveraging the young age that I have, mistakes can be fixed. I will prepare myself to purchase at least another property, fixing it up, putting it up for rent, and reconsider my financial position to see if I can redo it all over again. If I find problems in any steps, there will always be people who are keen to help.

Emergency fund

emergency fund

This is what I learned from various books like The Barefoot Investor, The Total Money Makeover, etc. I have grown my emergency fund to be sufficient for about 1.5 months now. And the goal for 2020 will be growing it to at least 3 months of my monthly expense.

This way I have a good cushion to fall back on, should any unexpected events show up. I will just park it in a high saving account (I use ING, with their high saving account at 1.95% pa).

Blog posts

Fullstack developer illustration

Of course I will continue writing blogs. It is entertaining and providing me a way to memorize what I learned, as well as sharing my knowledge and perspective to the world.

The goal for 2020 will be writing at least 52 blog posts, or 1 each week. This should be achievable, considering I only spend around 3 hours to create an article.

Upcoming blog posts will focus more on property investments, rather than just technology aspects that I have been posting. I feel like I have absorbed so much knowledge regarding property investment that I should go out and implement, then report my findings to you all.

“Challenge” present a good deal to investors

This is what I would like to try out in 2020. Where I can find an outstanding investment opportunity and gather all information needed. By presenting it to the investors, I hope to raise private funds to buy another property. This is a bonus challenge for myself, and I really hope that I can achieve it.

Summary

Well that is a lot of goals that I set for myself in 2020, and we have already finished the first week of 2020. I better be fast before the year ends.

By Tuan Nguyen

career achievement

Retrospective – What I achieved in 10 years?

10 years seems to be a long time, however to me, it sometimes happens so fast. Let’s look back and see what I have achieved in the last 10 years, and what I plan for the next decade.

Tl; dr;

What did I do?

  • Arrived in Australia.
  • Finished Bachelor degree.
  • Bought a house, and some investment properties.
  • Visited various places in Australia and the world.
  • Moved to Melbourne and obtained a good income position.
  • Got introduced to financial education.
  • Became an Australian citizen.
  • Founded a company.
  • Found a girlfriend 😀

What am I planning for the next 10 years?

  • Get personal finance organized.
  • Buy more properties :)))
  • Get married.
  • Achieve financial confidence.
  • Give back to the community.
  • Help suitable people to reach financial confidence as well.
  • Travel to various places.

What did I do and achieve in the last 10 years?

I arrived in Melbourne on the 14th of February, 2010. So it is almost 10 years living in Australia. I did a Bachelor degree of Information Technology and had the opportunity to work for IBM as an intern for a total of 5 years (2011 – 2015).

Graduation photo

Funny enough, I did not work there as a programmer, but rather a network engineer (SAN storage engineer). However I did have some opportunities to create automated scripts for the team to use (mainly in daily healthchecking, and storage provisioning).

In 2013, with some helps from my beloved parents, we purchased a property in Ballarat, and I lived there until I moved to Melbourne in 2016. Back then, the property price was $175,000; which we negotiated down to $160,000 and got the property with a small home loan, thanks to the stable income from IBM internship. The broker said it was the smallest one that he filed since he started his career.

In Ballarat, I have the opportunity to make friends with many people and they brought me to various areas that gave me the experience of how Aussies do in their weekends. I’ve been to numerous camping sites, walking tracks, skiing and even went to a scout camp retreat. Ballarat is a small town and there are not many activities, but somehow being with the nature helps me not feeling boring.

Some activities I engaged includes

Skiing

Skiiing

horse riding

Horse riding

spear fishing

Spear fishing

I also travelled to other countries as a tourist, e.g. Italy, Russia. The trips gave me a lot of new perspective, as well as opened my eyes to different cultures that I will express more in future blog posts.

What did I do in Melbourne?

After nearly 7 years in Ballarat (2010 – 2016), I decided to move to Melbourne after securing a better occupation after my granted PR. Funny that it only took me 2 weeks to get accepted as a PHP developer, and another 2 weeks to resign from IBM. So after 4 weeks I jumped from working in Ballarat to commuting and working in Melbourne.

After 9 months of commuting, and every Saturday driving for an hour to Melbourne for inspections, I decided to purchase another property that I called home for the next 4 years.

melbourne home

Since moving to Melbourne, everything exploded. Events happened so fast that looking back now, I probably have grown more after 3 years in Melbourne than the previous time in Ballarat. I got introduced to financial education via the first book I read Rich dad poor dadAfter finishing the book, I got curious and since then have read multiple books on the topic, e.g. Barefoot investor, The Richest man in Babylon, The 4-hour work week, etc. Now I am developing my own financial plan following some of the advice that I learned from the readings.

In 2016, just before I moved to Melbourne, I officially became an Australian citizen after 6 years living and studying. It was a big milestone and opened the doors to multiple opportunities that otherwise blocked for non-citizen.

dual passport

Last but not least, I got a girlfriend :D. She is smart and beautiful and I feel lucky to have her.

MJ and I

What’s my future look like?

First priority will be getting my financial position organized, since I have not had a good structure just yet. Only recently I have consulted several financial planners and see if their expertise align with my goals. 2020 will be a great year and I hope I can secure a good position in the first half of the year.

I have decided that investment properties will be the investment vehicle for me. Therefore buying more suitable properties is crucial to achieve a solid future. From the advice I got, I will need at least 5 Millions worth of net worth to be able to have a splurge life without having to work anymore.

Once I achieve financial confidence, I hope to give something back to the community. Either in the form of charitable funds, or going to exotic places and help people who have less luck than myself.

I also want to help other people who share the same vision for the future to achieve what I have. Once I have the experience, it is definite that I will pass on the knowledge to people. It is better to have more friends that share and achieve the same goals in life.

Marriage pressure is increasing year after year. However I hope that I will get married within the next 10 years. It is a long time so reasonably safe to assume.

Summary

“Most people overestimate what they can do in a day, and underestimate what they can do in a month. We overestimate what we can do in a year, and underestimate what we can accomplish in a decade.” – Matthew Kelly, The Long View

With the above forecast about my future, I am certain that I can achieve a lot more than what have been outlined. I believe that I create my own luck and will take all responsibility for my decisions.

My final question for you is, what did you do in the last 10 years?

By Tuan Nguyen

property investment

Discussion – National Rental Affordability Scheme

National Rental Affordability Scheme, or NRAS, is a government scheme to help low to moderate income people with an opportunity to rent homes at a lower rate.

Can investors like us take advantage of that? Let’s find out.

Tl; dr;

  • NRAS pays landlords with an incentive that is 20% or above market rent to offset what tenants need to pay.
  • NRAS commenced on 01 July 2008, and has been through 5 calls for applications.
  • There will be NO further call under this scheme in the foreseeable future.
  • NRAS targets low to moderate income tenants, and targets medium to large-scale investment body (usually 100 or more houses).
  • Payments usually comes in a form of refundable tax.

What is National Rental Affordability Scheme?

NRAS

Source: knowledgesource.com.au

In Layman’s terms, the government will pay a portion of rents to the landlords, and approved tenants will pay the remaining.

E.g. If market rentals is $1,000 per month, Australian government will commit to pay at least $200 per month, and the tenants only need to pay the remaining $800.

NRAS started on 01 July 2008, and was planned to go through 5 calls for applications. However the last call did not commence since the Scheme only supports 38,000 allocations. I.e. Only 38,000 properties can be approved for this scheme.

Who can benefit from this Scheme?

beneficiary

Source: travelinsurancegungei.blogspot.com

Low to moderate income tenants need to be approved to rent  the properties that were approved for this scheme. This means there are 2 separate approval processes that applies to the tenants and the properties. Tenants only need to pay up to 80% of the market rent, and the lowest is 20%.

E.g. If market rent is $1,000; tenants only need to pay between $200 to $800, depending on the approved finance.

The scheme aims to organisations that have about 100 or more houses, provides them with a financial incentive for up to 10 years. This means individual investors will not be able to apply for the scheme directly. However if they buy properties that are already approved, then the scheme will go with the properties.

Financial benefits come in the form of refundable tax credits. The amount of the tax credits is available here.

One thing to note is that the tax credits adjusts for inflation. Which means the amount of credits will be different each year, protects the investors from inflation.

Summary

NRAS is a scheme to help low to moderate income Australian to be able to rent their homes by providing financial incentives to landlord.

It is no longer open to apply in the foreseeable future. However if individual investors buy an approved property, the scheme will follow the dwelling.

By Tuan Nguyen

property investment

Discussion – First Home Loan Deposit Scheme

First Home Loan Deposit Scheme has been in the news since the Coalition won the election. Let us take a deep dive and see what it is and how you can benefit from it.

Disclaimer: information provided in this blog post does not constitute financial advice, please do it at your own risk.

Tl; dr;

  • The scheme is only for individuals who have not bought a property before, or for couple who BOTH have not bought a property before.
  • May work with FHSSS, according to the proposed plan.
  • Up to 10,000 applications per year.
  • No Lender Mortgage Insurance required.
  • Supports low and middle income class.

The scheme

The Coalition government, in the attempt to win the election, rolled out their plan to help low and middle income families to own a house without having 10-20% deposit. According to the plan, eligible applicants only need up to 5% deposit.

The plan allows average Australian to own their house easier, continuing the Australian dream.

The plan commences on 01 January, 2020. You can apply for it here.

What are the benefits

benefits of first home buyer scheme

Source: news.com.au

Multiple benefits are introduced with the scheme, as seen below.

  • Buyer only needs 5% deposit to apply to buy a property as their home.
  • No Lender mortgage insurance applied to properties bought under this scheme.
  • May work with First Home Super Scheme Saver, i.e. if buyer already has 5% of the property value in their super, they may be able to use that to buy the home they want.

An example of a property that can be bought under this scheme.

Property price $600,000
Buyer’s saving $15,000
Super balance $15,000
Saving + super $30,000 (5%)

With the above financial situation, he/she may be able to buy the property. There is no stamp duty since it still eligible for stamp duty exemption.

Disclaimer: there are other fees that can be applied as well, e.g. lodgement fees, PEXA fees, etc.

The catches

the caveat

Source: murfett.com.au

Of course it doesn’t come free, there are multiple caveats that come with the scheme.

  • Only 10,000 successful applications per year. This is quite reasonable and I don’t think there will be a shortage.
  • Australian citizen only, i.e. PR holders will not benefit from this scheme. Indirectly this reduces the potential applicants amount.
  • If a successful applicant refinances, the benefits will be gone. I.e. they will need to pay LMI once they refinance with less than 20% deposit on the house.
  • Applicants will need to have their annual taxable income less than $125,000; and a couple of less than $200,000 combined taxable income. This should not be a big concern, considering the income threshold is quite high.
  • If applying as a couple, both people will need to be first home buyers.
  • Only supports property that have values up to a threshold, this threshold depends on regions. You can find the full table here.
  • Banks want to charge a higher interest rate on properties under this scheme. More information here.
    • This is understandable. If buyers only have 5% saved up and not 20%, there are chances that they are not as responsible with money. Therefore the risk of defaulting is higher.

Summary

There are a lot of benefits for people who can take advantage of the First Home Loan Deposit Scheme. However they will need to be more responsible with their finance so they can keep their home.

Reading the fine print is crucial for families who apply. There can be multiple conditions that you need to know of before signing the contract.

By Tuan Nguyen

free tafe image

Unit review – Make decisions in a legal context

Another course that I completed in Cert IV: Accounting and Bookkeeping is Make decisions in a legal context.

Tl; dr;

The unit concerns about legality of a business. It teaches me about business structures, different kind of laws that apply to business such as employment law, property law, consumer law, etc.

It helps me for structuring my side business, as well as heading to the right direction in terms of keeping the business safe.

The Australian Legal system

legal system

Source: thecommonwealth.org

Split into 2 types, Legislation and Common Law, there are 2 sets of laws that define the Legal system.

  • Legislation: bills passed from the Parliament, and are enforced throughout Australia.
  • Common Law: made by Court when there is no relevant law for the case being heard.

Categories of Law:

  • Criminal Law: protects the society from wrong actions.
  • Civil Law: govern private dealings between individuals, e.g. Contract Law, Tort Law and Property Law.

I learned about Negligence a bit deeper than other areas of the law. Basically it is a neglect of the duty of care when it results in recorded damage of another individual.

Also there is mentions about Victorian Civil and Administrative Tribunal (VCAT), which I’m sure I’ll be touching base with them at some point. They are where we go when there are problems with tenants.

Australian Business structures

business structure

Source: pathwaylending.org

There are quite a few business structures that one can consider when deciding to go on a business venture

  • Sole trader:
    • probably the most common type of business out there. It allows an individual to conduct small business transactions and/or collect/pay GST.
    • Can have employees, and operate as a proper business.
    • The bad thing is that all personal assets are exposed to the public. If something bad happens to the business, e.g. bankruptcy, the owner may need to fork out his/her own assets to remedy the damage.
  • Partnership: similar to Sole trader, however the structure involves multiple people in the business.
  • Company:
    • Can be either public or private company. This is the most common structure for companies out there.
    • Can officially raise funds from investors.
    • Proper structure around taxes, and the tax rate is fixed at 30%.
  • Joint ventures
    • Similar to partnership, however, this business structure has a limited time.
    • 2 or more individuals/businesses join together to complete a project, and when the terms are satisfied, the joint venture is over.
  • Franchises
    • A franchisee is an individual that creates a business that operates under an existing system that a franchisor setup.
    • May be easier than creating an individual business, since the system and branding is already done by franchisor.
    • Limitation on how to operate, develop new products
  • Trusts
    • Good tool to protect family/individual assets.
    • Good tool to reduce income taxes paying to the government.
    • Multiple types of trusts that need to be thoroughly researched before creating one.
  • Associations
    • Operating not-for-profit, whose members have decided to give their organisation a formal legal structure.
    • Must have “Incorporated” or “Inc.” after its name.
    • Is a legal entity so an Association is exposed to all laws.
  • Co-operatives

Employment Contract

employment law

Source: allbusiness.com

There are 2 types of contracts

  • Contract of service:
    • signed between employer and an employee, contains all benefits, terms, wage amount, service description.
    • employer may be vicariously liable for employee’s actions.
    • employer must provide benefits to employees, such as super contribution, annual leave, sick leave, etc.
  • Contract for service:
    • signed between employer and a private contractor, which contains all terms and conditions regarding a particular piece of work.
    • employer is not liable to contractor’s work.
    • employer does not need to provide benefits for contractor, unless specified in the contract.

Property law

property law

Source: wolterskluwercentral.com.au

This is not limited to real estate assets. “Property” is the right of ownership.

Real property

  • Land, not just the soil, but anything growing on the land; and fixtures on the land, e.g. house, building, etc.
  • Title to land is a person’s right of ownership of the land (it is the title that we transfer when we buy/sell properties)
  • Adverse possession: this is very interesting, if someone occupies a piece of land for over 15 years without any dispute, they may be able to claim possession of the land.

Personal property

  • Choses(things) in possession: something that is tangible, e.g. clothes, equipment, car, etc.
  • Choses(things) in action: something that is intangible, e.g. company shares, intellectual property, etc.

Summary

This area was totally new to me. So it was interesting to learn about. There are lots of things to consider when creating a company, as well as knowing about things like adverse possession really opens my eye on property law.

By Tuan Nguyen

house price going up

Discussion – How technology affects housing prices?

Considered to be the largest commodity in the world, real estate has quite a notable exception with an estimated $217 trillion valuation.

Technology, with the emergence of the Internet had greatly impact the whole industry benefiting buyers, sellers, and agents. From the good old day’s basic cold calls, print ads, emails, open house visit, etc., we are now moving to a wide variety of social media sites, virtual apps, IoT devices, chatbots, cloud computing, advanced analytics, and blockchain. Thus, there’s huge room for sales, purchases, and prospects.

Not just that, technology has made it easier to get data on quality via user ratings on certain websites. People doesn’t only look for accessibility, pleasant climates, booming economies, and appealing amenities, but also the quality of nearby amenities.

recent study in the Journal of Urban Economics that uses data from Washington D.C. finds that restaurant quality, as measured by Yelp reviews, impacts property values: A doubling of the number of highly rated restaurants (rating > 3.4) within a mile radius of a home is associated with an 11.5% increase in the home’s value.

Information accessibility through technology thus, opens a wide market landscape with specific variables, thus, affecting housing prices.

As the aforementioned study has shown, housing prices increase in areas with the best amenities as the quality of those amenities becomes well known.

Tl; dr;

Technology plays a major role in making it easier for everyone to share and gather digital information in acquiring homes.It helps buyers getting more-realistic view of the property plus, the quality of amenities available on that certain area. The higher the housing demand on that area, the higher the housing value of the homes located nearby.

The housing industry does affects customer decision at the same time, the market value of homes.

The Ever-changing Housing Industry with Technology

smart home

Source: iot.eetimes.com

Traditionally based on three assets, namely land, building and money, the housing sector under the real estate industry has now digital information employed to technologically assess in terms of demographics, government policies, interest rates on certain locations through valuable apps and websites, enabling customers in need of buying or renting homes to deeply monitor housing rates. This is very much useful for the younger generation who will interested in home ownership.

In 2018, CoreLogic together with RTi Research of Norwalk, Conn., conducted an extensive consumer housing sentiment study, combining consumer and property insights. In their findings, potential buyers in the younger millennial demographic have the desire to buy, 40% are extremely or very interested in home ownership.

In fact, 64% say they regularly monitor home values in their local market. However, while, 80% of younger millennials plan to move in the next 4 or 5 years, 73% cite affordability as a barrier to home ownership (far higher than any other age cohort).

“Our consumer research indicates younger millennials want to purchase homes but the majority of them consider affordability a key obstacle,” said Frank Martell, president and CEO of CoreLogic. “Less than half of younger millennials who are currently renting feel confident they will qualify for a mortgage, especially in such a competitive environment.”

Rentals market

In talking about home value, online platforms such as Airbnb claimed that they bring more money to cities in both rental fees and the money that renters spend during their stays.The company also notes that roughly three-quarters of its listings aren’t in traditional tourist neighbourhoods, which means that money is going to communities typically ignored by the hospitality industry. Knowing that the company offers over 5 million properties, in over 85,000 cities across the world, and its market valuation exceeds $30 billion.

There is no further evidence on how they came to that conclusion.

Then on, a working paper has been published centering about the effects of home sharing on house prices and rents, collecting data from 3 sources:

  • consumer-facing information, from Airbnb, about the complete set of Airbnb properties in the U.S. (there are more than 1 million) and the hosts who offer them;
  • zip code–level information, from Zillow, about rental rates and housing prices in the U.S. real estate market; and
  • zip code–level data from the American Community Survey, an ongoing survey by the U.S. Census Bureau, including median household incomes, populations, employment rates, and education levels. We combined these different sources of information in order to study the impact of Airbnb on the housing market.

Investigation results show that in aggregate, the growth in home-sharing through Airbnb contributes to about 1/5 of the average annual increase in U.S. rents and about 1/7 of the average annual increase in U.S. housing prices. By contrast, annual zip code demographic changes and general city trends contribute about 3/4 of the total rent growth and about 3/4 of the total housing price growth.

Summary

Technology impact in the housing industry has underlying economics.

Evidences in the aforementioned study about Airbnb show that the platform affects the housing market through the reallocation of housing stock. And by looking at housing vacancies, Airbnb supplies two things: it positively correlates with the share of homes that are vacant for seasonal or recreational use and negatively correlates with the share of homes in the market for long-term rentals.

By Tuan Nguyen

React logo

Technology review – React 16.11

React 16.11 is already here after a month since the release of React 16.10. Let us see what they’ve got.

This version is not even listed in the release list just yet, maybe I’m just early.

Tl; dr;

Not much is happening, there are only 2 updates from the look of it. You can upgrade your code base if you don’t use any of the following experimental features: unstable_createRoot and unstable_createSyncRoot.

Bug fix

A single bug fix is included in React 16.11.

Fix mouseenter handlers from firing twice inside nested React containers.

This could troll developers quite a bit if they encounter this issue. And they will end up writing some hacks to get around it. I am grateful that it is fixed before I even get to experience the headache.

Removal of experimental API in stable build

This does not affect day-to-day development, since unstable_createRoot and unstable_createSyncRoot are just experimental APIs. However, by separating it from the stable build, it helps reducing the size of React 16.11 gzipped by 0.1%.

react size

Source: React github

You can still use these functions in the Experimental channel.

Facebook decided to release a minor version (React 16.11) because of the removal of a feature. Experimental or not, they are an important part of the library, and removing them deserves a big update.

Summary

Yet another small blog post. But we’re getting closer and closer to the Concurrent feature, as seen in React Conference 2019.

React logo

Technology review – React 16.10

Minor upgrade of React has come with version 16.10. Let us see what they did comparing to the previous upgrade.

Tl; dr;

React 16.10 comes with a bunch of bug fixes with no new feature added in.

Everything is backward compatible so you can upgrade your code base to React 16.10 with ease.

Bug fixes

React DOM

  • Fix edge case where a hook update wasn’t being memoized.
  • Fix heuristic for determining when to hydrate, so we don’t incorrectly hydrate during an update.
  • Clear additional fiber fields during unmount to save memory.
  • Fix bug with required text fields in Firefox.
  • Prefer Object.is instead of inline polyfill, when available.
  • Fix bug when mixing Suspense and error handling.

Most of these bug fixes are very specific, personally I haven’t come across any of these issues. But it is nice to see them fixed. One thing to notice is that there are a lot more issues currently open in the library issue board, and we will have more shipped in the future versions.

Scheduler (Experimental)

  • Improve queue performance by switching its internal data structure to a min binary heap.
  • Use postMessage loop with short intervals instead of attempting to align to frame boundaries with requestAnimationFrame.

The Scheduler is what React uses to optimize the performance of re-rendering the DOM. React team has spent a lot of time optimizing the internal feature to give us a nice performance that we need.

useSubscription

  • Avoid tearing issue when a mutation happens and the previous update is still in progress.

People have been using hooks for quite a while now, and they are useful in many circumstances. We would like to have a stable feature that we can depend on, and fixing bugs is getting us there.

Summary

Well this is a small blog post, but the impact of these bug fixes in React 16.10 are huge for the community. It proves that Facebook is still active in React development and it will not go away any time soon.

By Tuan Nguyen

32 bit vs 64 bit

Technology review – 32-bit vs 64-bit OS

An operating system, also known as “OS”, keeps everything together, managing all the hardware and software on your computer.

It communicates with your device’s hardware: from your keyboard, mouse, storage devices, display, and Wi-Fi radio. Plus, OS also has a lot of software like common system services, libraries, and application programming interfaces (APIs). You can directly interact with the operating system through a user interface such as a command line or a graphical user interface (GUI).

When we talk about operating systems, 32-bit and 64-bit operating systems are the most popular choices in the tech market.

The “bit” term there, also known as “binary digit”, denotes about the smallest piece of data in a computer. We already know that a computer only understand binary language (by 0s and 1s), and every bit can have just one binary value, either 0 or 1. A computer stores data in a collection of such bits known as a byte. 8 bits make up a byte, also called an octet.

In computer architecture, 32-bit is capable of transferring 32 bits of data whenever it performs an operation while 64-bit allows computers to process data and memory address by 64 bits.

Generally, the more data that can be processed at once, the faster the system can operate.

Tl; dr;

Most computers made in the 1990s up to early 2000s were 32-bit machines supporting 32-bit OS, but as the need for faster and more efficient data-handling capabilities quickly becomes a necessity, then emerged the 64-bit architecture.

Today, most new processors are based on the 64-bit architecture and support 64-bit OS, they are also backward-compatible with 32-bit operating systems.

Only a few of the computers are still utilizing 32-bit architecture, commonly referred to as x86 systems (in reference to the first 32 bit 286\386\486 systems).

Few of the remaining 32-bit operating systems available on the market today are:

  • Microsoft Windows – include Windows 95, 98, NT, 2000, XP, Vista, and Server;
  • Linux – include Red Hat, Mandrake, and Ubuntu;
  • Solaris – versions 1-10;
  • Mac OS – Classic (84-2001) and OS X; and
  • FreeBSD – versions 1-8.

What are the differences between 32-bit and 64-bit operating systems?

how operating system works

Source: howstuffareworking

In the early 1990’s, majority of desktop and laptop computers work in 32-bit OS (via 32-bit processor). Most of them are based on Intel’s successful IA32 architecture also known as the x86 (286, 386, 486).

The ever increasing requirements came new hardware and software architectures that introduced the 64-bit OS.

64-bit architecture has been used by supercomputers since the 1970s. It is used in RISC (reduced instruction set computing) based workstations and server in the early 1990s.

A program running on a 32-bit OS can easily address 4 gigabytes of memory-recall, 232 is roughly 4.3 billion. While a program, running on a 64-bit OS can address 264, 4 billion times 4 billion bytes – a large number indeed.

When comparing these two OSes, 64-bit OS simply leaves a huge mark.

Compare to 32-bit OS, 64-bit OS increases program performance, offers security protection, and allows you to create 16TB of virtual memory and store 264 computational values. Offering dual-core, six-core, quad-core, and eight-core versions, its multiple cores increase your computer’s processing power, making it run faster. It also helps software programs to operate efficiently.

With 32-bit, the only edge is that it’s compatible with all older devices developed in early 2000 and late 1990. Vendors no longer develop application for 32-bit OS. Due to a lack of market demand, manufacturers do not often offer 32-Bit driver versions for their hardware.

Summary

The main difference between 32-bit and 64-bit operating systems is the way they manage memory. 32-bit is limited to a total of 4 GB maximum of system memory while 64-Bit has a limit of 16 Terabytes maximum of system memory allocation. This is vitally important for performance because data in memory is accessed thousands of times faster than from a disk drive. Also, programs load much faster into memory.

By Tuan Nguyen

keyboard on fire

Discussion – Can software damage hardware?

As the present day’s cyber technology innovation is improving, the threat landscape widens as well.

Cyber criminals are constantly finding ingenious ways to tunnel into businesses, schools, government offices, computer users, and IT systems, disrupting services and daily operations.

Several years ago, hackers and malware have shut down nuclear centrifuges in Iran and severely damaged an unnamed steel mill in Germany.

Knowing the advancements we have today, could such incidences be possible enough?

As headlined on an article from a fictional Weekly World News in 2000, reporting that “hackers can now turn your home computer into a bomb and blow your family to smithereens, and do so remotely from thousands of miles away,” it’s quite impossible to happen in reality.

newspaper featuring hackers

Source: WIRED

It’s a yes and a no, theoretically and hypothetically, in fact, such conditions like this are somewhat unrealistic in most machines today.

Considering your definition of damage, it might be possible in some EXTREMES:

  • Making your CPU usage a 100% (over its maximum temperature);
  • Turning your speakers volume to max into then enjoy a lot of your favourite playlists over a few weeks, non-stop;
  • Writing on the USB drive a few hundred million times, making it unusable then; or
  • Researching the drive geometry and issuing the worst possible commands with your HDD Drives. Thus, making it hot very soon and shortening its lifespan.

Obviously, you need a lot of time to damage your computer.

Tl; dr;

Upon answering the question about the software harming your hardware, it’s a battle between a YES and a NO.

As all hardware is driven by software, it is technically possible to destroy your hardware or at least make it inoperable by messing with software. Think about overclocking, wherein, you’re doing changing settings in the BIOS, allowing low access to low level settings. Mess up and voila! Your hardware is gone. Also, there are viruses that could potentially take advantage and would possibly disrupt and destroy your hardware since the system can be modified.

No, in the sense that, software is nothing but a flow of electricity that’s why it cannot damage hardware by itself.

Lastly, a software can damage another software in the hardware that makes it work, but this doesn’t essentially break the hardware.

Is it TRUE that software can damage your hardware? How would that even be possible?

hardware and software

Source: ITI SOLUTIONS

There’s quite a few instances wherein you can definitely say that software can “potentially” harm your hardware.

In theory, numerous incidences might be:

A BIOS Flash.Some motherboards allow you to flash (modify) the BIOS via software from within the OS. Eventually, this opens a backdoor for malware to flash the BIOS to something that will damage the processor.

Overclocking tools. Another one, some motherboards provide overclocking tools, allowing you to change CPU settings from within the OS. Same as the first situation, once a virus takes over that, putting your CPU’s settings to the extreme then BOOM!

Stress-tests and intensive applications. Over-exerting your CPU to its limits could spike temperatures, which can eventually damage it. Of course, the fan in your computers help cool the CPU down, and most CPUs are designed to shut off when they reach a dangerously high temperatures (thermal shutdown).

In such cases, if an attack is possible even in theory, CrowdStrike, a security vendor says YES.

“We can actually set the machine on fire,” said Dmitri Alperovitch, CrowdStrike CTO in a statement.

BUT…

The exploit requires completely replacing the Mac’s firmware, which controls every aspect of the hardware.

This means that you need to offer a fake Mac firmware update, convincing the user to install it.

Summary

A software can potentially damage a hardware unless it’s malicious but for legit software it’s too impossible to happen.

For the German steel mill incident, someone found a way to control the plant’s equipment, preventing people on site from shutting down a blast furnace.

As with Stuxnet, the one about nuclear centrifuges, it didn’t destroy computers – it exploited computers attached to centrifuges, and destroyed them.

It is unlikely to happen that viruses will destroy your computer, but hackers might someday go after the objects connected to it.

By Tuan Nguyen