#CryptoCurrency #crypto #investing #InvestmentPlans #FinancialSecurity
Crypto currency looks appealing as an investment, but there are many pitfalls.
Without going further, the best way to invest for your future is a plan for slow, gradual growth over time. There are quick bucks, but they are not always sustainable. There are shiny objects, trends and fads. But they are seldom permanent.
As for crypto, it is seen as a way to invest in a vehicle that is completely unregulated – off the financial grid of stocks, bonds, banks, metals, commodities, real estate etc., that all have rules and laws regulating them. Violating those rules is fraud, and quite punishable.
These are online memes. They have no value to back them up, other than the money people use to buy them. As traditional investment products have supply and demand scales, crypto has only a demand scale. Supply is irrelevant.
MSNBC news anchor Rachel Maddow compared crypto coins to Beanie Babies.
To those who don’t remember, the company Ty put out these stuffed toys decades ago that, according to the movement, would become very valuable. People were buying them in bulk for cheap, thinking they would become a collector’s item. When stores ran out of them, buyers stalked the UPS trucks, hoping to get back to the store as the new shipment arrived.
Today, they typically sell for about $6 each.
Hummel figurines were another past collector’s item. They were a bit more expensive than Beanie Babies, but their appreciation in value has become, well, suspect over the years.
Crypto is the new thing. Folks with lots of money are getting in on it. Some people have been charged with fraud in connection with it. They also can be hacked, and an investor could lose everything.
Another rule of thumb in investing: When the big investors decide to cash out, the smaller investor is left holding the bag. These small investors may have a nice online meme, but it could become worthless.
So, if you are thinking of investing in crypto because it looks easy, lots of folks are getting in on it and it is completely unregulated, stop. Get some good financial advice from someone you trust.
Whatever money you put into it could be gone tomorrow, or next month or next year.
Anything is possible. The demand for crypto could go on for years. The big guys may not cash out or commit fraud.
And, no investment of any kind, other than, perhaps, a bank account or CD that is insured, is guaranteed.
But, crypto may be worth an extra careful look.
The person of relatively low means almost always has the desire to make it big easily and never worry.
That’s why the lottery and casinos stay in business.
It may be too early to equate crypto with gambling, but it is plainly insecure as an investment.
Remember: Trends tire. Fads fade. And shiny objects lose their luster.
To repeat: If you want a secure financial future, be a good, diligent saver. Adopt a plan in which you contribute those savings over time. Stay disciplined and don’t spend the money too soon. Keep an eye on it, but don’t watch it constantly, because there will be ups and downs. Make changes as needed over time.
Staying relatively consistent with a good plan is the best way to secure your financial future.
Peter