“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:
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