Are Traditional Investments Dead?
Before I get too far into this post, let me say that this is more of a hypothetical thing. If you are coming here to find concrete evidence of why traditional investments are dying, I don't have that. What I do have are some random thoughts (from my office a la @anomadsoul), and an open invitation for you to comment on this post with your own thoughts.
As a person in my mid to late (ugh) forties, it's safe to say I have one foot squarely in each side of the traditional/crypto debate. I've been putting money into mutual funds and stocks for so long now that I almost take for granted that the money is gone. That's the way you are supposed to do it I guess. Keep putting a little away from each paycheck so that you don't even notice it is gone. Then you up it a little, rinse and repeat.
While I wish I had started saving a whole lot earlier, I know there are many people who are in a worse position that me. A quick browse of the finance section of any mainstream news site will likely give you countless articles about how people have no or not enough savings for retirement.
The idea of a emergency fund is a foreign subject or wishful thinking to many people who are struggling to pay their housing and utility costs. My wife and I are pretty blessed to have decent paying jobs and even we don't have the emergency savings fund that we probably should.
Thanks to crypto, I have been debt free for over a year now. However, as I was telling @tarazkp in a comment the other day, I know @mrsbozz and I are one major home repair away from needing to take out loan and once again being in debt. That's not a cool feeling to have.
On the flip side, I have a friend who has enough money in savings that they could likely cover a major home repair, but based on our discussions their retirement savings are woefully lacking.
It's a toss up, do you want hardly any savings but some decent investments that pay you 7% to 10% interest every year? If I had to take out a loan right now I could probably get 5.99% interest. That's pretty high given where we were a couple of years ago, but still not too bad given the recent skyrocketing rates. Plus, I'm still making on average 8 to 9 percent interest on my traditional investments, so it sill plays out in my favor.
Looking back at my friends, sure, they might not have to take out a loan, but that money they just have sitting in savings is only earning them .5% (maybe 1%) interest if they are lucky. When you look at it that way, retirement (if ever) seems a lot further away for them.
As I said at the opening, I have my feet firmly planted in both spaces. I don't see that changing anytime soon. I am less than a decade away from retirement, and as things sit right now, the traditional finance side of things is still king.
After being in crypto for five years now, I can clearly see that changing.
Hanging out in the Leo Finance Discord, it is interesting to hear the number of people who have zero traditional investments but are heavily invested in crypto.
That's only going to grow as we move forward. We have already seen the shift starting to take place. Take the growth of apps like Robinhood for example. Many people who never would have considered hiring a broker to buy stocks or funds are investing.
People clearly want to be in control of their own money. With these same apps now giving people an entry point into crypto, we are only going to see more and more people taking back ownership of their funds.
When I was younger, one of my favorite movies was Monty Python and the Holy Grail. It's just a stupid fun movie. You can't take it seriously, but it has so many fantastically quotable lines.
This scene with the black knight immediately comes to mind when I think of cryptocurrency and traditional investments. Crypto is King Arthur and traditional investments are the black knight of course. Slowly watching themselves fade into nothing, but never willing to admit it.
What do you think friends? Have your opinions of traditional investments changed since you got involved in crypto? If you even have traditional investments. I can tell you on my fifth monitor at work, it isn't the NYSE or NASDAQ I have open all day, it's livecoinwatch.
Sports Talk Social - @bozz.sports
Posted Using LeoFinance Beta
https://twitter.com/1215324076861865984/status/1599752415669940225
The rewards earned on this comment will go directly to the people( @bozz ) sharing the post on Twitter as long as they are registered with @poshtoken. Sign up at https://hiveposh.com.
This post has been manually curated by @bhattg from Indiaunited community. Join us on our Discord Server.
Do you know that you can earn a passive income by delegating your Leo power to @india-leo account? We share 100 % of the curation rewards with the delegators.
Please contribute to the community by upvoting this comment and posts made by @indiaunited.
Great analogy. Love the Monty python films. I think you have more options for investing in the US with your 401k's but my main investment/traditional is like you in stocks and index funds that I hope will do some heavy lifting.
However, I do think there are some great opportunities in crypto and I hope to get a nice boost from them or to have wasted a lot of time trying. LOL!
Another aspect is getting a pension, if you retire early you could lose out.
Yeah, my wife and I are pretty lucky in that working for the public school system we both get a pension from the state. I've always been skeptical about whether or not that will still be there when it is time for us to retire though, so we both have a number of additional investments just in case. I honestly prefer being in control of my own portfolio versus counting on someone else. Imagine that!
Posted Using LeoFinance Beta
If I could trade in cryptocurrencies as experienced as you, I would definitely invest in it.
I wouldn't call myself experienced at all. Lucky is probably more like it! I have picked up a thing or too, but I am relatively small fish compared to some people!
Posted Using LeoFinance Beta
I am like you; I have invested in stocks since I can remember (since I started working 23 years ago.) I started to save in precious metals about 7 years ago, and a little crypto five years ago. Cryptos are most volatile!
I am not as exposed to precious metals as I wish I was. I am trying to change that, but I think if I had the choice I would rather just stick with crypto. It might come back to bite me one day, but we will see.
Posted Using LeoFinance Beta
Even my Financial planner balks at holding any amount of gold and looks at me funny. Same thing with Crypto. He's more interested in getting his trailer fees. Time to move what retirement funds elsewhere.
Posted Using LeoFinance Beta
Yeah, I totally get that. My broker is the same way when I talk about crypto. It is only recently that he has really started to pay more attention. I know he is probably making a mint off me in fees, but they honestly make it so hard to have significant investments like that without having some kind of intermediary.
Posted Using LeoFinance Beta
My opinions on traditional investments haven't changed so much as I have added crypto. I didn't want to change something that has worked amazingly well for me. I do deal in crypto, but, only with money that I am not counting on for anything.
I do day trading on the side and the profit from that is free money. (so to speak)
Emergency funds are so important, especially now in such uncertain times. I encourage my kids to put away 10% of their paychecks (even in High School) to a place where it can grow as an emergency fund. While it is not much money going in, it will be someday. That little bit rarely hurts.
I was always of the opinion that I wanted to have zero debt more than I wanted to have a ton of savings. My savings account suffered because of that. Even now when I don't have debt, it is still hard to get into that savings mindset. Especially since most of my investments just happen automatically.
Posted Using LeoFinance Beta
It’s a mixed bag in our household. My wife’s retirement accounts are “traditional”, my retirement/non-retirement investments are heavily weighted towards crypto. Hopefully at least one of us does well. 😅
I hope so for you as a well! It sounds like you are well diversified no matter what!
No, it has not. I still invest in traditional finances and I still think crypto can succeed in the future. It's not there yet and I feel safer diversifying things as it has worked over the past few decades.
Posted Using LeoFinance Beta
I'm the same way. I know to some degree it is a broken system, but I also know it isn't going away time soon. There will be some bumps, but it is here for at least as long as I am probably.
I have both, but I will be totally honest, I only count traditional investments. As far as I am concerned I don't count any crypto investment, to me they are all complete gambles and even though I have been in crypto since 2014 I am fully aware they could all go up in smoke. BTC aside, the rest have the possibility to end up at 0.
Posted Using LeoFinance Beta
That is very true. I kind of look at my crypto stuff as icing on the cake. When I am retired, I will depend on my traditional investments to be my steady stream of income. If my crypto investments can supplement that, then all the better!
Posted Using LeoFinance Beta
Exactly , crypto is the icing on the top!
The treats and bonuses will be from crypto ;)
I hear a lot of people in crypto saying legacy finance is dying and many in legacy finance saying crypto has peaked and will never regain its former value. I'm of the belief that neither of those things are true and both will co-exist for a long time to come. Our generation (X) is in a really unique position to have a little experience in both of these worlds. I think legacy finance is prepping to implement a lot of blockchain-based tech in the next couple of years.
I trust crypto more than the stock market. I have a Vanguard account and am invested in a few ETFs directly on their platform. I also track these using a third party portfolio tracker (Delta) and on any given day the Delta app shows my ETF portfolio is worth 25% less than Vanguard does. Vanguard always pads the value, and sometimes by a significant amount. It's so deceptive. Shady, shady things happen in legacy finance.
Paying off debt is ALWAYS a smart choice. I did that before I started building our savings/investments. With interest rates where they are our Amex high yield savings account has given us the best yield so far this year.
I know I need to do a better job of getting money into savings. It seems that there is always something that comes up. It's amazing how being discerning about your finances doesn't go away once your debt is gone. I agree, many of us our age are in the unique window of being able to take advantage of both sides of things. It's very exciting.
If you've paid off your debt you are WAY ahead of the game. I applaud you for doing that, it's something to be very proud of!
Thanks. The mortgage is next in the list.