On Crypto
From Boomer to Bitcoin.
After my recent posts, I’ve had a couple of people suggest that I invest in cryptocurrencies. Initially, I was defensive about it. But I remembered Dr. Jordan B. Peterson’s rule in his book 12 Rules For Life
Assume that the person you are listening to might know something you need to know; Listen to them hard enough so that they will share it with you.
I tried to listen to their argument with an open mind and here is the conclusion I came to after some back and forth conversation.
Note: Crypto hasn’t been around for very long, and it’s been incredibly volatile in the time that it has. There is no doubt it is an incredibly risky investment. But with great risk, comes great returns.
The 10% FOMO Rule
After thinking it through a little, I could find no reason not to put 10% of my portfolio into cryptocurrencies.
At worst, I lose 10% of my investment dollars which is, by all means, no fun but recoverable nonetheless.
At best, I have the possibility to 10X or even 1000X my money.
This strategy, I believe, is a good middle ground. Those putting their money in stocks have to wait 30–40 years to truly see eye-dropping returns. Those putting their money in cryptocurrencies make crazy returns in the short-term but risk losing it all if they aren’t careful.
With this 10% rule, you don’t have to choose between one or the other.
You can keep 90% of your money in relatively safe index funds which you know are going to make you a millionaire in the long-term, and have 10% in cryptocurrencies so you don’t feel like jumping off a cliff if they 1000X and you weren’t part of it at all.
Like most things, the answer isn’t this or that. It’s a little bit of both.
The 10% rule is useful principle of behavioural finance because it allows you to get your fix of excitement whether it comes from gambling, sports betting, individual stocks or crypto, without jeopardizing your long-term financial plan.
Very important: When it comes to cryptocurrency, only invest money you’re willing to lose.
Hop on the YOLOcoaster!
If you’re doing this strategy you might as well invest in more obscure small-cap cryptocurrencies because they offer the most upside, which is the whole point of the 10% rule. These include:
- INJ
- COTI
- AVAX
- BAND
- BNT
- REEF
- VET
- REN
- MANA
- EGLD
- ALGO
- VGX
You can buy these by signing up with Binance
Of these, 9 might go to zero, while the other 3 could possibly multiply your investments by a factor of 10 or even 100. Put 50$-100$ in each and just see what happens.
If you don’t feel comfortable with cryptocurrencies and are looking to build long-term wealth safely and reliably you can read my article on index funds below.
This is worth repeating once more,
DON’T INVEST A CENT IN CRYPTO THAY YOU AREN’T WILLING TO LOSE !
