I started following your ultimate investing checklist from couple of years.
To diversity our portfolio i was thinking how it would be to invest some part of my savings into a cryptocurrency. Do you invest/suggest to invest some portion into cryptocurrency as part of retirement?
Need your thoughts on investing some portion into cryptocurrency for retirement.
Obviously not Jeremy but here is my two-cents… Cryptocurrency is an unregulated jungle of risk. Since it is for retirement, if you have some money you’re willing to give up for when you retire, toss it in the cryptocurrency market. One way to make this decision is to try to following: Take the amount of money you want to invest in crypto, and put it in this compound interest calculator. Set the “Annual Addition” to 0, “Years to Grow” as = 55 - your current age, and “interest rate” to 7%. Keep everything else set as is.
If you are willing to give up that amount of money from your retirement, go try for some crypto. Risk when you are young is much easier to stomach than when you’re 10 years out from retiring.
Crypto is cool. Maybe it’s the future, I don’t know. But here’s what I do know about it:
Those three things stand in stark contrast to what I would consider “real” investments like index funds or investment real estate. That puts crypto squarely in the category of either “commodity” (like oil, gold, etc) or “currency” (like USD, Euro, etc)
So more generally, do I invest in commodities or currencies? I don’t. Because I want my money WORKING for me… generating profits, paying dividends, etc. I don’t buy gold for the same reason I don’t buy Euros… over long periods of time they don’t (or barely) outpace inflation.
That said, is crypto going to be the same? I have no idea because I can’t see the future. But I certainly can’t be SURE that it will go up in the future like it did in the past.
If you want to get into crypto, I’d follow my 90/10 rule. With 90% of your portfolio buy and hold index funds. With the remaining 10%, go nuts. If you want some of that to be crypto, go for it. If you’re such a smart crypto trader, then your 10% is gonna quickly outpace your 90% and you can buy one of those skywriting planes and write “ur dum” over my house.
But if crypto crashes or stays flat for the next 40 years, at least you’ll still be a millionaire from your 90%. 