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.
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