"Bitcoin is my potential pension"

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catdude
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"Bitcoin is my potential pension"

Post by catdude » Sun Feb 04, 2018 1:07 am

Hi there Bogleheads -

I really haven't been paying much attention to the Bitcoin mania... but I thought I'd share a Washington Post article on some folks in Kentucky who are looking for a big kill...

https://www.washingtonpost.com/business ... 0f56971561
As bitcoin and its many competitors are hitting the mainstream, a once-lucrative market is turning instead into perhaps the world’s most volatile — what some economists call a speculative bubble in line with the dot-com craze of the late 1990s. Investors are bidding up prices of bitcoin and its many smaller competitors and selling in a panic. Values of cryptocurrencies soar and plunge in a matter of hours, sometimes by more than 30 percent. Far away from Silicon Valley, the people riding the roller coaster swing between excitement and dread, all while gathering at local meetups, downloading apps to track their investments, and sharing tips on message boards and chat groups — one is called “Cointucky.”
Everybody wants to get rich quick.....
catdude | | All generalizations are false, including this one.

TheAncientOne
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Re: "Bitcoin is my potential pension"

Post by TheAncientOne » Sun Feb 04, 2018 1:09 am

The desire of something for nothing will never go out of style.

Grt2bOutdoors
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Re: "Bitcoin is my potential pension"

Post by Grt2bOutdoors » Sun Feb 04, 2018 1:11 am

TheAncientOne wrote:
Sun Feb 04, 2018 1:09 am
The desire of something for nothing will never go out of style.
+1

A sucker is born every minute.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

david1082b
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Re: "Bitcoin is my potential pension"

Post by david1082b » Sun Feb 04, 2018 1:21 am

As bitcoin and its many competitors are hitting the mainstream, a once-lucrative market is turning instead into perhaps the world’s most volatile — what some economists call a speculative bubble in line with the dot-com craze of the late 1990s. Investors are bidding up prices of bitcoin and its many smaller competitors and selling in a panic. Values of cryptocurrencies soar and plunge in a matter of hours, sometimes by more than 30 percent
Bitcoin has always been ultra-volatile, I remember microbloggers were documenting daily booms and crashes in real-time in 2012-2013. Journalists say the most bizarre things about this stuff, as if there wasn't a well-documented monster runup in 2013 before a 70% decline next year. The number of people in Bitcoin was much smaller back then too. Journalists are implying that back in the good old days the smart money made easy money on BTC, but now the retail newbs are here it's gone all volatile and stuff!
“People have this perception of bitcoin as fast money,” Melin said. “Because it was.”
Erm, no. The first time I heard of Bitcoin was on Paul Krugman's blog in Autumn 2011 I think, after a 90% decline from the summer. When was the "fast money"?

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JoMoney
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Re: "Bitcoin is my potential pension"

Post by JoMoney » Sun Feb 04, 2018 1:36 am

catdude wrote:
Sun Feb 04, 2018 1:07 am
...
Everybody wants to get rich quick.....
Yup, I personally know at least 6 people "invested" in Bitcoin/crypto-currencies. In talking to them, it seems to me they're mostly interested in making money, as measured in U.S. dollars...somewhat ironically. They'll talk up a big game about the potential for Bitcoin/Blockchain, ignore, dismiss, or sometimes vehemently protest the negative aspects... but I don't know a single person who spends Bitcoin or uses it as a way to transfer value... but they're very interested in checking the day-to-day price of it if they theoretically cashed out to U.S. dollars.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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HomerJ
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Re: "Bitcoin is my potential pension"

Post by HomerJ » Sun Feb 04, 2018 1:41 am

catdude wrote:
Sun Feb 04, 2018 1:07 am
Everybody wants to get rich quick.....
"After years of disappointment with get rich quick schemes, I know I'm gonna get rich with this scheme. And quick. "

-Homer J Simpson

Grt2bOutdoors
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Re: "Bitcoin is my potential pension"

Post by Grt2bOutdoors » Sun Feb 04, 2018 1:42 am

Read the article - the retired, unemployed, teachers and then we have the case of the software salesman who making a decent salary is thinking this is going to be “his pension”. Let’s make this actionable - a pension is a defined or undefined set of payments made to oneself over their lifetime. It usually requires either an extremely large sum of monies to be deposited all at once or significant annual or monthly contributions to be deposited over ones lifetime that compounded with interest, dividends and market appreciation grows to some amount of monies that can then be used to purchase a single premium immediate annuity and/or using a variety of withdrawal percentages generally recommended not to exceed 4% of the total to live upon.

The article (comments section was enlightening) fails to mention if the software salesman is saving in either a 401k plan or IRA. If you have money for crypto, you have money for an IRA or 401k. Saving money by eating couscous for lunch to throw it away on speculation is worse than buying lottery tickets, at least you stand a chance of winning something - in crypto, it’s like throwing money into the wind.
Last edited by Grt2bOutdoors on Sun Feb 04, 2018 1:55 am, edited 1 time in total.
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HomerJ
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Re: "Bitcoin is my potential pension"

Post by HomerJ » Sun Feb 04, 2018 1:47 am

Ouch, that is a scary sad article
Knight, meantime, went home, cooked dinner and then decided to reopen one of the eight cryptocurrency apps he had downloaded. His account had fallen nearly $500 on the day — his initial $1,500 was below $900 — and he said he was “freaking out.” But then, he thought about what it meant to be a cryptocurrency investor. There would be days such as this. But there might be better days, too — much better days. If there were, he did not want to miss out.

“I’m almost afraid not to take the chance,” he said, and soon, he added $260 to his cryptocurrency account.

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catdude
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Re: "Bitcoin is my potential pension"

Post by catdude » Sun Feb 04, 2018 1:50 am

HomerJ wrote:
Sun Feb 04, 2018 1:41 am
catdude wrote:
Sun Feb 04, 2018 1:07 am
Everybody wants to get rich quick.....
"After years of disappointment with get rich quick schemes, I know I'm gonna get rich with this scheme. And quick. "

-Homer J Simpson
*chuckle* :)
catdude | | All generalizations are false, including this one.

Robconoclast
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Re: "Bitcoin is my potential pension"

Post by Robconoclast » Sun Feb 04, 2018 8:58 am

HomerJ wrote:
Sun Feb 04, 2018 1:41 am
catdude wrote:
Sun Feb 04, 2018 1:07 am
Everybody wants to get rich quick.....
"After years of disappointment with get rich quick schemes, I know I'm gonna get rich with this scheme. And quick. "

-Homer J Simpson
Perhaps we all can learn a lesson about seeking to get rich quick via speculation from Homer Simpson.

https://youtu.be/u196yHvR8K8
https://youtu.be/3w5D9yJUMOc

:beer
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Valuethinker
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Re: "Bitcoin is my potential pension"

Post by Valuethinker » Sun Feb 04, 2018 9:25 am

https://www.theatlantic.com/magazine/ar ... ll/505814/
How Casinos Enable Gambling Addicts
Modern slot machines develop an unbreakable hold on many players—some of whom wind up losing their jobs, their families, and even, as in the case of Scott Stevens, their lives.
The similarities between trading cryptocurrencies, and the psychological and neurological mechanisms described in the above article, are striking.

Think day trading in the dot com era.

I have also witnessed this in spread betting on foreign exchange.

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ClevrChico
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Re: "Bitcoin is my potential pension"

Post by ClevrChico » Sun Feb 04, 2018 9:40 am

The belly aching on Reddit about having to pay capital gains taxes on bitcoin has been amusing. I was very tempted to suggest muni bonds if they didn't want to pay taxes.

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F150HD
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Re: "Bitcoin is my potential pension"

Post by F150HD » Sun Feb 04, 2018 10:29 am

he was with his fourth employer in a decade, and the pay, about $90,000 per year, left him feeling stuck in place.

So 90k is poverty in America...

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JoMoney
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Re: "Bitcoin is my potential pension"

Post by JoMoney » Sun Feb 04, 2018 10:35 am

ClevrChico wrote:
Sun Feb 04, 2018 9:40 am
The belly aching on Reddit about having to pay capital gains taxes on bitcoin has been amusing. I was very tempted to suggest muni bonds if they didn't want to pay taxes.
Pay capital gains? They should be lucky if it's eligible to be considered capital gains. I would think it should be more like a 988 transaction and be taxed as ordinary income (but with more paperwork).
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

Valuethinker
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Re: "Bitcoin is my potential pension"

Post by Valuethinker » Sun Feb 04, 2018 10:49 am

F150HD wrote:
Sun Feb 04, 2018 10:29 am
he was with his fourth employer in a decade, and the pay, about $90,000 per year, left him feeling stuck in place.

So 90k is poverty in America...
It entirely depends upon where you live, I think. $90k in New York or San Francisco is scraping to get by.

There are low cost of living places in the USA where, if stable, this is an excellent salary.

Stability is important. There are blue collar trades that make that kind of money, but injury or downturn can finish it off. Owning property or building up an investment portfolio are to a substantial extent dependent upon continued income.

I don't suppose any American is more than a serious illness or chronic condition away from poverty. Yes, to some extent you can insure, but for example I don't think blue collar workers can easily insure against disability?

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F150HD
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Re: "Bitcoin is my potential pension"

Post by F150HD » Sun Feb 04, 2018 10:55 am

Valuethinker wrote:
Sun Feb 04, 2018 10:49 am
F150HD wrote:
Sun Feb 04, 2018 10:29 am
he was with his fourth employer in a decade, and the pay, about $90,000 per year, left him feeling stuck in place.

So 90k is poverty in America...
It entirely depends upon where you live, I think. $90k in New York or San Francisco is scraping to get by.

There are low cost of living places in the USA where, if stable, this is an excellent salary.

Stability is important. There are blue collar trades that make that kind of money, but injury or downturn can finish it off. Owning property or building up an investment portfolio are to a substantial extent dependent upon continued income.

I don't suppose any American is more than a serious illness or chronic condition away from poverty. Yes, to some extent you can insure, but for example I don't think blue collar workers can easily insure against disability?
yea agreed $ is relative to location....my post was just mirroring one of the comments below the article.

Image

tesuzuki2002
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Re: "Bitcoin is my potential pension"

Post by tesuzuki2002 » Sun Feb 04, 2018 11:10 am

catdude wrote:
Sun Feb 04, 2018 1:07 am
Hi there Bogleheads -

I really haven't been paying much attention to the Bitcoin mania... but I thought I'd share a Washington Post article on some folks in Kentucky who are looking for a big kill...

https://www.washingtonpost.com/business ... 0f56971561
As bitcoin and its many competitors are hitting the mainstream, a once-lucrative market is turning instead into perhaps the world’s most volatile — what some economists call a speculative bubble in line with the dot-com craze of the late 1990s. Investors are bidding up prices of bitcoin and its many smaller competitors and selling in a panic. Values of cryptocurrencies soar and plunge in a matter of hours, sometimes by more than 30 percent. Far away from Silicon Valley, the people riding the roller coaster swing between excitement and dread, all while gathering at local meetups, downloading apps to track their investments, and sharing tips on message boards and chat groups — one is called “Cointucky.”
Everybody wants to get rich quick.....

Pensions go bust too!!!

Valuethinker
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Re: "Bitcoin is my potential pension"

Post by Valuethinker » Sun Feb 04, 2018 11:47 am

tesuzuki2002 wrote:
Sun Feb 04, 2018 11:10 am
catdude wrote:
Sun Feb 04, 2018 1:07 am
Hi there Bogleheads -

I really haven't been paying much attention to the Bitcoin mania... but I thought I'd share a Washington Post article on some folks in Kentucky who are looking for a big kill...

https://www.washingtonpost.com/business ... 0f56971561
As bitcoin and its many competitors are hitting the mainstream, a once-lucrative market is turning instead into perhaps the world’s most volatile — what some economists call a speculative bubble in line with the dot-com craze of the late 1990s. Investors are bidding up prices of bitcoin and its many smaller competitors and selling in a panic. Values of cryptocurrencies soar and plunge in a matter of hours, sometimes by more than 30 percent. Far away from Silicon Valley, the people riding the roller coaster swing between excitement and dread, all while gathering at local meetups, downloading apps to track their investments, and sharing tips on message boards and chat groups — one is called “Cointucky.”
Everybody wants to get rich quick.....

Pensions go bust too!!!
If you are well diversified, they should not do.

Look at 60% equities, 40% bonds. Taking the worst 30 year periods, or even the worst 15 year periods in US financial history, that would not have wiped you out. Even Japan over the last 30 years, it would not have wiped you out.

Or did you mean conditions of hyperinflation? Your pension would survive, but it would not be worth much.

Defined Benefit pension schemes of course go bust meaning their assets fall short of their liabilities (their sponsors can go bust as well). The multi employer schemes insured under PBGC appear to be very close to doing same.
Last edited by Valuethinker on Sun Feb 04, 2018 3:25 pm, edited 1 time in total.

Valuethinker
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Re: "Bitcoin is my potential pension"

Post by Valuethinker » Sun Feb 04, 2018 11:48 am

F150HD wrote:
Sun Feb 04, 2018 10:55 am
Valuethinker wrote:
Sun Feb 04, 2018 10:49 am
F150HD wrote:
Sun Feb 04, 2018 10:29 am
he was with his fourth employer in a decade, and the pay, about $90,000 per year, left him feeling stuck in place.

So 90k is poverty in America...
It entirely depends upon where you live, I think. $90k in New York or San Francisco is scraping to get by.

There are low cost of living places in the USA where, if stable, this is an excellent salary.

Stability is important. There are blue collar trades that make that kind of money, but injury or downturn can finish it off. Owning property or building up an investment portfolio are to a substantial extent dependent upon continued income.

I don't suppose any American is more than a serious illness or chronic condition away from poverty. Yes, to some extent you can insure, but for example I don't think blue collar workers can easily insure against disability?
yea agreed $ is relative to location....my post was just mirroring one of the comments below the article.

Image
Ahh I see.

Thank you.

The tragedy is these guys probably think the "investing" they are doing is going to work out better than playing the lottery, say.

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Epsilon Delta
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Re: "Bitcoin is my potential pension"

Post by Epsilon Delta » Sun Feb 04, 2018 1:37 pm

Grt2bOutdoors wrote:
Sun Feb 04, 2018 1:11 am
A sucker is born every minute.
If only. You're a wild eyed optimist. By at least 2 orders of magnitude.

Valuethinker
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Re: "Bitcoin is my potential pension"

Post by Valuethinker » Sun Feb 04, 2018 3:21 pm

Epsilon Delta wrote:
Sun Feb 04, 2018 1:37 pm
Grt2bOutdoors wrote:
Sun Feb 04, 2018 1:11 am
A sucker is born every minute.
If only. You're a wild eyed optimist. By at least 2 orders of magnitude.
Suggesting (a la Kahneman and Tversky but also evolutionary psychology) that it had some survival value in our prehistoric past-- for some individuals in the group to be rash gamblers with much worse than average odds of individual survival.

The "Fast" and "Slow" systems in Kahneman's typology are always in conflict.

As with habitual gamblers, these are people where the fast system is over powerful. Neuroplasticity is real, so we don't know whether that is genetic, in the womb, or in early life experiences. Perhaps one gives susceptibility to the other factors.

The internet is something our Stone Age (I had written stoned age, which is a separate issue arising from more recent social trends ;-)) brain never evolved to deal with. That possibility for instant gratification. There's a whole science of making apps more addictive, for example, and an evolving debate about the ethics of that.

If one reads the article I linked to above, the "near miss" in particular seems to be particularly addicting, and slot machines are so programmed to give that illusion.

Financial asset prices similarly-- instant gratification and near misses. And an illusion of control over what are, in fact, random processes-- to see patterns where there are not.

Most of the stories of downfalls of financial traders etc have cocaine or other drugs in them, and cocaine is a drug well associated with loss of inhibition and self monitoring, grandiose behaviour etc.

Cookie Dough
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Re: "Bitcoin is my potential pension"

Post by Cookie Dough » Sun Feb 04, 2018 3:44 pm

Grt2bOutdoors wrote:
Sun Feb 04, 2018 1:11 am
TheAncientOne wrote:
Sun Feb 04, 2018 1:09 am
The desire of something for nothing will never go out of style.
+1

A sucker is born every minute.
A little odd WP would print this article after bitcoin is down 50% in two months. I guess it wasn't until 2009 we got the sob-stories about the housing bubble. By that calendar, we should see WP articles on the crypto crash in December 2018.

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Epsilon Delta
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Re: "Bitcoin is my potential pension"

Post by Epsilon Delta » Sun Feb 04, 2018 3:57 pm

Valuethinker wrote:
Sun Feb 04, 2018 3:21 pm
Epsilon Delta wrote:
Sun Feb 04, 2018 1:37 pm
Grt2bOutdoors wrote:
Sun Feb 04, 2018 1:11 am
A sucker is born every minute.
If only. You're a wild eyed optimist. By at least 2 orders of magnitude.
Suggesting (a la Kahneman and Tversky but also evolutionary psychology) that it had some survival value in our prehistoric past-- for some individuals in the group to be rash gamblers with much worse than average odds of individual survival.
I would put it differently. There was no evolutionary disadvantage to being a sucker in this sense. Lots of situations in our current world had no counterpart in the past so evolution disregarded them. People who are suckers for mass delusions are often quite shrewd in small groups, like poker games.

If we are going to let Darwinian evolution deal with it we just have to wait for gazillians of deaths or removals from the gene pool. On the other hand once we have culture Lamarckian inheritance becomes an alternative. Or we could even learn from the experience of unrelated individuals. So I guess it's just a race to see if Darwinism can evolve intelligence. If it can do that we'll be set.

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arcticpineapplecorp.
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Re: "Bitcoin is my potential pension"

Post by arcticpineapplecorp. » Sun Feb 04, 2018 10:00 pm

“Us little guys working our butts off, we can’t get ahead,” Cedric Knight, 35, told Melin. “This is a once-in-a-lifetime opportunity to change my life.”
You can get ahead over time, over the course of your life. The problem is you're trying to retire and you're only 35. While some may be able to do that, the majority of folks can't. But that doesn't mean most people can't invest over a 30-40 year career and have amassed an amazing sum over that time that will help sustain them through retirement with dignity.
He was learning more from economics podcasts than he was from his classes.

So he dropped out and pulled the remaining $22,000 from an education fund his mother had set up for him. He invested in cryptocurrency....But in 2017, he made $770,000, money he used to buy a three-bedroom house, a pickup truck and a cat.
Wonder how much he has/had left of that? He'll never be the millionaire next door if he spends his money instead of letting his money continue to make more money for him. Too bad the WP decided to use the word "invest" with regards to cryptocurrency. It's not investing.
The people who worked with him at the Horseshoe Casino were more interested in buying lottery tickets, he said, than in listening to his investment advice.

“Everybody thought I was crazy,” Melin said.

Then, that started to change. The price of a bitcoin in 2017 shot up to $2,000, and then $5,000, and then $10,000, and then, briefly, nearly $20,000.
But he wasn't giving investing advice. He was giving gambling advice. Speculating advice. Not investment advice. The WP author makes the classic mistake of confusing outcome with strategy. Just because he had a good outcome doesn't mean he took the right strategy.

Does anyone else see the irony in the fact that he was working at the Horseshoe Casino, yet thought he was "investing" in cryptocurrency?
Finally in the morning, when his profit was wiped out, he sold his 25,000 mintcoin, recouping only the money he had put in. He told himself he had made a mistake.
The mistake was thinking he was investing when he was gambling:
He reminded himself of how his life might look in five years. “I could be writing a check to pay my house off,” he said. “That’s the excitement I have.”
Investing should be boring. Gambling is exciting.
“My thinking, everybody should be in this to some extent,” Melin said. “You have it as an insurance against the traditional market.”
Cryptocurrency is not insurance. Insurance is Insurance. Cryptocurrency is gambling. Doesn't really sound like he was investing in the "traditional market" so I don't know what insurance he was even looking for.
His account had fallen nearly $500 on the day — his initial $1,500 was below $900 — and he said he was “freaking out.” But then, he thought about what it meant to be a cryptocurrency investor. There would be days such as this. But there might be better days, too — much better days. If there were, he did not want to miss out.

“I’m almost afraid not to take the chance,” he said, and soon, he added $260 to his cryptocurrency account.
"Chance"? He admits he's taking a chance. Instead he could be investing in real tangible assets that produce real tangible earnings and he'd receive his fair share of those earnings in dividends and price appreciation. He's clearly confused about what investing is and is not.
He was only slowly saving for retirement. Unlike his father, he did not have a pension.
Guess somewhere along the line he never learned that while saving for retirement may seem "slow" for a long time, the most gains come later on. An investor who starts at age 25 investing $286.45 a month until 65 (40 years) earning a CAGR of 8% per year gets to $1 million:

Image
source: https://www.kitces.com/blog/is-save-for ... nt-advice/

These stories continue to make me sad. But thank you for sharing it anyway.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

GCD
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Re: "Bitcoin is my potential pension"

Post by GCD » Mon Feb 05, 2018 6:49 am

HomerJ wrote:
Sun Feb 04, 2018 1:47 am
Ouch, that is a scary sad article
Knight, meantime, went home, cooked dinner and then decided to reopen one of the eight cryptocurrency apps he had downloaded. His account had fallen nearly $500 on the day — his initial $1,500 was below $900 — and he said he was “freaking out.” But then, he thought about what it meant to be a cryptocurrency investor. There would be days such as this. But there might be better days, too — much better days. If there were, he did not want to miss out.

“I’m almost afraid not to take the chance,” he said, and soon, he added $260 to his cryptocurrency account.
Oh c'mon, don't be so harsh. That's a sound strategy and an iron gut... he's buying the dip.

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Re: "Bitcoin is my potential pension"

Post by Grt2bOutdoors » Mon Feb 05, 2018 7:20 am

Epsilon Delta wrote:
Sun Feb 04, 2018 1:37 pm
Grt2bOutdoors wrote:
Sun Feb 04, 2018 1:11 am
A sucker is born every minute.
If only. You're a wild eyed optimist. By at least 2 orders of magnitude.
Have co-workers “investing” in bitcoin, I’ll inquire and see how they’ve done - they were getting in just as it was peaking and asked if I was interested in joining the “ponzi”, umm, I mean investment opportunity. :oops:
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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TomatoTomahto
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Re: "Bitcoin is my potential pension"

Post by TomatoTomahto » Mon Feb 05, 2018 8:04 am

I have an ex brother-in-law who undoubtedly got in on this, as he's missed very few get-rich-quick schemes. Thankfully, I no longer have to worry about how it will affect my sister.
Zero Net Carbon by 2019.

Slothmeister
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Re: "Bitcoin is my potential pension"

Post by Slothmeister » Mon Feb 05, 2018 10:04 am

That title should be "Bitcoin is my potential poison."

Frisco Kid
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Re: "Bitcoin is my potential pension"

Post by Frisco Kid » Mon Feb 05, 2018 11:23 am

Ahhh to be young. As 22 year old's many of us spent time and money "chasing rainbows" which tickled our fancy. For me it was playing the horses. After all at that age we thought we knew everything anyway. Throughout life via the school of hard knocks hopefully one gains wisdom?

fatlever
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Re: "Bitcoin is my potential pension"

Post by fatlever » Mon Feb 05, 2018 11:54 am

ClevrChico wrote:
Sun Feb 04, 2018 9:40 am
The belly aching on Reddit about having to pay capital gains taxes on bitcoin has been amusing. I was very tempted to suggest muni bonds if they didn't want to pay taxes.
Accurately calculating how much taxes you own is actually an impossible task when you have thousands of transactions across 10-15 exchanges with dozens of cryptocurrencies. The biggest problem is you do not know how much you bought and sold something for in terms of dollars because the value of small-cap cryptocurrencies can fluctuate up to 20-40% DAILY and they are traded against Bitcoin and Ethereum which themselves can fluctuate 15-20% daily.

an_asker
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Re: "Bitcoin is my potential pension"

Post by an_asker » Mon Feb 05, 2018 12:09 pm

Valuethinker wrote:
Sun Feb 04, 2018 11:48 am
F150HD wrote:
Sun Feb 04, 2018 10:55 am
Valuethinker wrote:
Sun Feb 04, 2018 10:49 am
F150HD wrote:
Sun Feb 04, 2018 10:29 am
he was with his fourth employer in a decade, and the pay, about $90,000 per year, left him feeling stuck in place.

So 90k is poverty in America...
It entirely depends upon where you live, I think. $90k in New York or San Francisco is scraping to get by.

There are low cost of living places in the USA where, if stable, this is an excellent salary.

Stability is important. There are blue collar trades that make that kind of money, but injury or downturn can finish it off. Owning property or building up an investment portfolio are to a substantial extent dependent upon continued income.

I don't suppose any American is more than a serious illness or chronic condition away from poverty. Yes, to some extent you can insure, but for example I don't think blue collar workers can easily insure against disability?
yea agreed $ is relative to location....my post was just mirroring one of the comments below the article.

Image
Ahh I see.

Thank you.

The tragedy is these guys probably think the "investing" they are doing is going to work out better than playing the lottery, say.
I disagree with you guys and see his point. Yes, he may be 1% in his neighborhood, but what if all his friends in the same field (he is IT salesman doing a good job, per the article) are making much more than him? I believe folks in similar job category in the Bay Area and the northeast make about double what he makes. So, I can see him feeling "stuck".

That said, I disagree with his modus operandi to get "unstuck"! :oops:

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HomerJ
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Re: "Bitcoin is my potential pension"

Post by HomerJ » Mon Feb 05, 2018 12:33 pm

Frisco Kid wrote:
Mon Feb 05, 2018 11:23 am
Ahhh to be young. As 22 year old's many of us spent time and money "chasing rainbows" which tickled our fancy. For me it was playing the horses. After all at that age we thought we knew everything anyway. Throughout life via the school of hard knocks hopefully one gains wisdom?
I read a book on how to play craps and count cards at blackjack. I seriously thought I was going to be a professional gambler.

First trip to Vegas, took $1000, paid for the entire week, and came home with $2000. That was a good week.

Second trip to Vegas, lost the $1000 bankroll, pulled out another $1000, lost that too... That was a bad week.

Third trip to Vegas, lost the $1000 bankroll, put another $1000 on a credit-card, lost that too... That was a horrible week.

Cured me of gambling though, so maybe a cheap lesson in the grand scheme of things.

Helo80
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Re: "Bitcoin is my potential pension"

Post by Helo80 » Mon Feb 05, 2018 12:54 pm

HomerJ wrote:
Mon Feb 05, 2018 12:33 pm

I read a book on how to play craps and count cards at blackjack. I seriously thought I was going to be a professional gambler.


HomerJ --- Have you tried acting or creating a sitcom about your family life?

RRAAYY3
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Re: "Bitcoin is my potential pension"

Post by RRAAYY3 » Mon Feb 05, 2018 1:07 pm

My favorite part about this nonsense tanking [aside from the blatantly obvious bubble in December] - is that anyone I know involved in "cryptos" actually thinks they are outsmarting "the system".

Now they desperately try and get out of it in order to exchange back to [less] actual currency or they double down on the "investment".

Embrace the boredom of indexing.

Helo80
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Re: "Bitcoin is my potential pension"

Post by Helo80 » Mon Feb 05, 2018 1:30 pm

You read these articles, and begin to feel badly the sheer level of foolish that people have with money.

Invariably, somebody is going to lose a home, car or something else (if it has not already happened), because Wall Street and "The man" screwed them over on bitcoins. "Wall Street bought low, sold high, and then left me footing the bill!!!!!"

Some of the comments on the article are gold.

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Will do good
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Re: "Bitcoin is my potential pension"

Post by Will do good » Mon Feb 05, 2018 1:40 pm

I feel really sad for many of these people, they don't know any better (uneducated or otherwise) and keep digging deeper into debt.
Their problem will turn into family problem and than will turn into our (public) problem.

KATNYC
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Re: "Bitcoin is my potential pension"

Post by KATNYC » Mon Feb 05, 2018 1:44 pm

Bitcoin is all the rage but some people don't seem to understand it despite their investment.
There are bitcoin machines (like ATMs) in NYC and the convenience store owner when asked about it couldn't explain. It seems he is just being paid to have the machine in the store. A couple of people did come in to use it by inserting cash and getting a claim ticket for their Bitcoin.

Helo80
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Re: "Bitcoin is my potential pension"

Post by Helo80 » Mon Feb 05, 2018 1:56 pm

I definitely appreciate OP for putting this story on my radar --- the comments are hilarious on the article.

That being said, I think threads that turn into a bash fest/mockery of these "investors" plight tend to lead to a locked thread.

staythecourse
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Re: "Bitcoin is my potential pension"

Post by staythecourse » Mon Feb 05, 2018 3:13 pm

HomerJ wrote:
Sun Feb 04, 2018 1:41 am
catdude wrote:
Sun Feb 04, 2018 1:07 am
Everybody wants to get rich quick.....
"After years of disappointment with get rich quick schemes, I know I'm gonna get rich with this scheme. And quick. "

-Homer J Simpson
Funny, because I have no doubt one can get rich quick, but the problem is it is not easy to replicate. The ONLY way I have seen folks get rich quick are: Inheritance, gene lottery, stealing, marrying into it, and pure luck (being "found" as an actor, lottery, penny stocks, turning in Bin Laden before he was killed, etc...)

None of the above is actionable though. Excepts maybe, marry into it, but my wife would likely not approve of it. :D

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

GCD
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Re: "Bitcoin is my potential pension"

Post by GCD » Mon Feb 05, 2018 6:51 pm

KATNYC wrote:
Mon Feb 05, 2018 1:44 pm
Bitcoin is all the rage but some people don't seem to understand it despite their investment.
And therein lies some of the problem. People are conditioned to move ahead on things they don't understand. People don't understand how their car works, they still drive. They don't understand stocks vs. bonds, but they still plow money into their 401K. They buy a house thinking "tax deduction" without thinking it through to see if it works for them. Why should all these people worry about understanding bitcoin before buying in so they "don't miss out"?

I'm not defending plowing money into bitcoin, I just think a lot of stock investors aren't all that far off in understanding. Let alone subscribing to BH theory, how many stock investors don't even understand the concept of fees reducing return?

I got lucky, my dad was an econ professor who introduced me to Vanguard as a child. He could've been an idiot though, or just subscribed to conventional wisdom at the time (why own the whole market when you can outsmart it???). I got started with index funds young by accident. I was on autopilot using daddy's philosophy for a good long time. Not everyone is blessed with a BH for a dad.

furnace
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Re: "Bitcoin is my potential pension"

Post by furnace » Mon Feb 05, 2018 7:16 pm

People lose money in non-Bitcoin stuff too. Remember the housing bubble? How can anyone lose buying a house? Well, it happened to millions! Houses were not haunted as an asset class. It's that prices crashed, which can happen to any asset class. I just hope people would keep an open mind regarding Bitcoin.

bhsince87
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Re: "Bitcoin is my potential pension"

Post by bhsince87 » Mon Feb 05, 2018 7:21 pm

Reminds me of a relative who spent $20k on Beanie Babies back in the 90's.

He literary said the same thing," This will be my pension in 20 years."
Retirement: When you reach a point where you have enough. Or when you've had enough.

harvestbook
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Re: "Bitcoin is my potential pension"

Post by harvestbook » Mon Feb 05, 2018 8:02 pm

If you need any schadenfreude and also reassurance that the Bogle way is best, read some Bitcoin Reddit, particularly the Daily Discussion. Lots of people "buying this dip" or "selling at a loss to buy in cheaper" or "have to sell at a loss because I have to pay the money back in two weeks."

https://www.reddit.com/r/Bitcoin/
I'm not smart enough to know, and I can't afford to guess.

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arcticpineapplecorp.
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Re: "Bitcoin is my potential pension"

Post by arcticpineapplecorp. » Mon Feb 05, 2018 8:17 pm

furnace wrote:
Mon Feb 05, 2018 7:16 pm
People lose money in non-Bitcoin stuff too. Remember the housing bubble? How can anyone lose buying a house? Well, it happened to millions! Houses were not haunted as an asset class. It's that prices crashed, which can happen to any asset class. I just hope people would keep an open mind regarding Bitcoin.
I think you're missing some details here.

For instance, if I have a house (even if there's a mortgage on it) and it drops in value, I've lost nothing. I still have a place to live. And I'd only LOSE money if I sold it for less than I bought it. If I decided instead to live there for 30 years and pay off the mortgage, there's a good chance the value would recover, and I may be able to sell it for MORE than I bought it.

Now the reason many LOST money in housing during the GFC is because:
1. They bought more house than they could afford (even WITH their income) because they were buying subprime mortgages which in some cases were interest-only loans. They wouldn't have been able to afford to pay the regular mortgage (even WITH their income) and they were planning on selling (for a profit, never expecting the market to go down) or refinance, etc. They gambled and lost. They shouldn't have been in houses they couldn't afford.

2. They lost their job and then couldn't afford to continue paying (even if they could before they lost their job) and couldn't get rehired for months or years.

3. They walked away, got foreclosed, dropped the keys in the mail to the bank, etc.

Houses require upkeep: mortgage, taxes, insurance, repairs, etc. Stocks don't. Bonds don't. You don't just lose money in these because the value goes down, unless you sell them AFTER they go down in value. You caused that loss.

But stocks and bonds (total markets here, not individual stocks) are appreciating assets because they provide dividends and interest. Bitcoin doesn't. Assets that appreciate over time may go down in value but they usually recover and they pay dividends and interest in the meantime. Bitcoin doesn't. It can go down and never come back up again (like individual stocks or junk bonds that can't continue to pay and default). So I'm not sure what it is that I'm supposed to keep an open mind about.

If you believe in bitcoin, I believe the onus is on you to convince us why we're wrong. The bitcoin adherents are in the minority, not the majority. As I write this bitcoin is at $6946.85. If you think it's a great asset you should be backing the truck up to buy as much as you can now that it's down 65% from it's all time high (and that was just a few months ago).
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

Helo80
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Re: "Bitcoin is my potential pension"

Post by Helo80 » Mon Feb 05, 2018 8:26 pm

bhsince87 wrote:
Mon Feb 05, 2018 7:21 pm
Reminds me of a relative who spent $20k on Beanie Babies back in the 90's.

He literary said the same thing," This will be my pension in 20 years."

The Beanie Baby collector I knew said "This will pay for my college"

InvestInPasta
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Location: Italy

Re: "Bitcoin is my potential pension"

Post by InvestInPasta » Tue Feb 06, 2018 2:56 am

Image
When studying English I am lazier than my portfolio. Feel free to correct my english and investing mistakes.

KATNYC
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Re: "Bitcoin is my potential pension"

Post by KATNYC » Tue Feb 06, 2018 9:25 am

GCD wrote:
Mon Feb 05, 2018 6:51 pm
KATNYC wrote:
Mon Feb 05, 2018 1:44 pm
Bitcoin is all the rage but some people don't seem to understand it despite their investment.
And therein lies some of the problem. People are conditioned to move ahead on things they don't understand. People don't understand how their car works, they still drive. They don't understand stocks vs. bonds, but they still plow money into their 401K. They buy a house thinking "tax deduction" without thinking it through to see if it works for them. Why should all these people worry about understanding bitcoin before buying in so they "don't miss out"?

I'm not defending plowing money into bitcoin, I just think a lot of stock investors aren't all that far off in understanding. Let alone subscribing to BH theory, how many stock investors don't even understand the concept of fees reducing return?

I got lucky, my dad was an econ professor who introduced me to Vanguard as a child. He could've been an idiot though, or just subscribed to conventional wisdom at the time (why own the whole market when you can outsmart it???). I got started with index funds young by accident. I was on autopilot using daddy's philosophy for a good long time. Not everyone is blessed with a BH for a dad.
I wish I had known early on. I started investing at 18 with my dad's Broker.
I've avoided Bitcoin because it doesn't make sense to me. I don't invest my cash in things I don't understand and nobody could succinctly explain it to me. When I saw that the Bitcoin conference stopped taking Bitcoin for payment, that was the end of the idea for me.

fatlever
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Re: "Bitcoin is my potential pension"

Post by fatlever » Tue Feb 06, 2018 10:16 am

harvestbook wrote:
Mon Feb 05, 2018 8:02 pm
If you need any schadenfreude and also reassurance that the Bogle way is best, read some Bitcoin Reddit, particularly the Daily Discussion. Lots of people "buying this dip" or "selling at a loss to buy in cheaper" or "have to sell at a loss because I have to pay the money back in two weeks."

https://www.reddit.com/r/Bitcoin/
I don't think this is particular to cryptos. Check out WallStreetBets subreddit where some people have been maxing credit to buy 3X leveraged ETFs and option trade. High risk and play money is very different from responsible index investments. The problem becomes if this is the meat and potatoes of your portfolio.

Helo80
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Re: "Bitcoin is my potential pension"

Post by Helo80 » Tue Feb 06, 2018 10:34 am

fatlever wrote:
Tue Feb 06, 2018 10:16 am
I don't think this is particular to cryptos. Check out WallStreetBets subreddit where some people have been maxing credit to buy 3X leveraged ETFs and option trade. High risk and play money is very different from responsible index investments. The problem becomes if this is the meat and potatoes of your portfolio.

It'll be interesting what happens on WallStreetBets if the economy takes a turn for the worse. Much like the bitcoin sub, it's easy to make this all seem so simple when the markets go up and up.

rkhusky
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Re: "Bitcoin is my potential pension"

Post by rkhusky » Tue Feb 06, 2018 10:43 am

Helo80 wrote:
Mon Feb 05, 2018 1:30 pm


Invariably, somebody is going to lose a home, .
Like these people:
https://www.cnbc.com/2017/12/11/people- ... -borg.html

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