Safe assets for crypto cowboys

Safe assets for crypto cowboys

 

 

Welcome to the Paradise paradox today I want to talk to you about why it's not always wise to keep all of your net worth in cryptocurrency put it into other things here are some examples of things you can put what are some safe assets where can I put my money that I know it's still gonna be there in a year or ten years twenty years time and people had some unusual responses they were saying things like it's it's easy all you need to do put some of your money in a margin lending account from BitFenix and you get 10% per annum on your ether and I was like hold on so you're saying it's safe to put my money in an exchange which is only existed for about five years you know holding it in an open-source software project which is only existed for about three years in an industry it's only existed about nine years which has a history of failure among exchanges that doesn't really sound safe to me at all actually that sounds very much the opposite of safe and if you talk to anybody in traditional finance if they think anything about cryptocurrency is secure or reliable as an investment obviously you're gonna get a resounding no you'll notice the other day when the ratings agency how to look through cryptocurrencies they were afraid to even give Bitcoin or ether or any of these supposed blue-chip cryptos and oh the highest that they give it was was it B obviously is partly because they're worried about the overextending themselves but it also shows that the kind of reputation that these things have and the traditional finance world so I did some thinking and I did a lot of research one book that I've been reading is Tony Robbins money master the game I recommend you have a look at this book I've also heard people recommend his book unshakable which I haven't read yet but apparently it has some good financial advice in walls and Tony talks a lot about his idea of a magical money machine that is developing enough passive income and you can do what you want to do not what the man tells you to do so if you're in a job and you decide that it no longer serves you you can tell the boss where to stick it now that's the kind of power I would like to have in my life I'm sure a lot of people out there are in the same position they want to be able to have some control over who says what they do you want to be able to leave a job if it's not working out for you and move out into the world go to Israel or go to Lake at the plam in Guatemala for a few days if you feel like that's a good thing to do that's the kind of financial security and eventually financial independence and financial freedom that makes life really cool so I was having a look at a few things now firstly you precious metals precious metals obviously.

They don't actually have a return except if you're looking at things like mining stocks junior mining stocks gold royalty streamers which are a kind of company which holds royalties to mines just in case they actually just discovered gold and then they can increase their holdings but precious metals of themselves namely normally silver and gold and then you have platinum and palladium which are also options on the table you might never get amazingly rich holding on to silver and gold but they good to have at least in a small amount by 5% 10% of your portfolio because at least you know that they're probably going to keep up with inflation and they may even outpace it so they may even grow slightly and purchasing power over time and basically if everything else Falls if you have that tail risk but everything goes to pot at least you still have the cold hard silver in your hands and it feels good to have a gold bar or a silver bar on your hand a nice 10 ounce silver bar you can feel the weight of it and the feel of it is just like you know why people use this as money when you feel it it it feels good there is a case that gold and silver are actually going to explode in capin priced over the next five or ten years it's not certain but there's a possibility the thing is the gold and silver markets are fixed they're very manipulated what happens in some cases financial institutions do this thing called naked short-selling and that means they can sell you the silver certificate and it says this entitles the bearer to one ounce of silver but if you go in and try to exchange it they'll actually say oh we don't really have any silver or they tell you to wait a couple of weeks as they get some made up and then they can actually give it to you so basically there's all these silver certificates floating around the market that don't actually have the silver backing and the industrial demand for silver is quite strong especially among electronics so it tends to be around two hundred and thirty million ounces that gets used up in smartphones like this one tablets laptops PCs so there is a lot of demand there and the amount that the supply is increasing from mining doesn't actually keep up with that so one day maybe soon the market will start to realize actually you can't exchange yourself certificates for silver and that would be when the price really breaks up breaks out that is that's not secure that's that's not a guarantee but there is a case there so at least if you're holding gold and silver you know it'll maintain your value and as a second part possibly it will even increase in price a lot then another instrument which I've been looking at exchange-traded funds no actually I didn't know what they were I heard a lot of people talk about them and if you've never bought one you probably don't know what one is either so it's quite simple in a way it's similar to a mutual fund or like a superannuation or 401k that you probably have as a forced savings plan if you live in the developed nation so what happens with with a managed fund or mutual fund is you you buy a bunch of shares and they actively managed the fund so they're buying a basket of shares and bonds and other assets to hold for you but they're actively trading.

So every day they're probably buying and selling something just to justify that position and that means that the fees tend to be quite high two or three percent per year which means if you have a large portfolio that can mean that you're paying thousands of dollars a year and that can really eat into your savings or into your investments over time because of compound interest the magic of compound interest means that over a long period two percent probably doesn't sound that much over a year but over ten years or thirty years they can make the difference between you having enough money to retire and you having a problem so that's the thing with these index funds or with the ETFs they're not actively managed there passively managed so maybe they readjusted portfolio once or twice a year buy and sell some assets and get them into the right percentages that means their fees are a lot lower so instead of being two or three percent like they will be with a managed fund or mutual fund there'll be less than 1% in a lot of cases in less than 0.1% in other cases as well so this is a cool way for you to buy a lot of bonds or a lot of stocks so people saying it's it's smart to diversify and don't keep your eggs in one basket in this case you you can't buy the entire basket so you can buy the entire US bond market or the entire US stock market that's also for example the S&P 500 that's famous one when I'm looking at is h SP HD which is high dividend low volatility US shares and with these instruments you can with the pawns you can expect to get a return of two or three percent yet it's likely to help pace inflation by it by a little bit and which stocks you can get a return of six or eight percent a year another investment vehicle that I'm looking at is peer-to-peer lending and it's true peer-to-peer lending can normally be quite risky because you're just learning to regular people and if they default it can be hard to follow up with them and it can be hard to collect what cost there is one site that have been looking at not giving in the recommendation but this is this is the kind of thing that you might consider it's called market lend and it's not lending to individuals it's actually lending to businesses so business is gone there and say we need a ten thousand fifty thousand dollar loan and it breaks it into small chunks and then you can buy small chunks of those loans.

The cool thing about it is some of these loans are actually guaranteed that is they're insured by QBE so if the business actually goes belly-up defaults on the loan you can still collect and in some cases you collect the principal and the interest that means that you can collect eight percent a year with quite a low level of risk and this is another way that the finance thin tech industry is maneuvering around the banks so we don't have to use thanks so much anymore and that means that we collect more interest and the business is borrowing money get their loans for cheaper so it works so what's out pretty well all round except for the banks those guys are shut out from the mix so these are a few things that you can look at to preserve your wealth if you had some crypto gains of the last year or so having some precious metals feels good especially compared to the crypto market where things going up and down 10 or 20 percent today it's nice to have some solid assets some nice boring grandpa type assets some gold buried in your backyard that you know will be there when times get tough remember cryptocurrency is all just still an experiment nobody knows what's gonna happen it's possible that the entire thing would just disappear tomorrow that's possible so it makes sense to hedge your bets it makes sense to put your wealth somewhere else pivot not all of it but somewhere else where you know it will be secure in the future thanks so much for listening this is kurt robinson signing off in canberra here today I went into the Mexican Embassy and spoke to them about getting a readmission an agreement of readmission into Mexico and all signs look positive hopefully within about three months I'll be back in Guadalajara living it up and sipping pina coladas in lxd authorial with mis amigos thanks so much for listening have a great day invest safely remember this isn't financial advice I'm just trying to let you know my own thinking processes have a great day.

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