Lost money through Bitconnect scam - learned my lesson

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Just_For_Jenna
Posts: 49
Joined: Sat Aug 31, 2013 5:52 am

Lost money through Bitconnect scam - learned my lesson

Post by Just_For_Jenna » Sat Jan 20, 2018 10:25 am

I’ve been living the Boglehead life for the past 6-7 years. Three fund portfolio and have stuck to the plan. I’ve also made a lot of money so my net worth has risen substantially from income and investments. More money just meant more savings and I’ve also been paying down my mortgage.

Until January 1st of this year.

I’ve been watching the crypto game from the sidelines for some time. I’ve seen Bitcoin go up and down, and I looked at it like I look at individual stocks - is not for me, index funds are my strategy. However I’ve watched some coworkers, all of whom I respect very much, talk about and show their investments in this Bitconnect platform sky rocket. None of them were recruiting me. However I finally decided to give it a shot. I took some money, above and beyond my normal savings and investment goals, and bought into the platform. It paid a daily interest rate based on the “bitcoin trading bots and the volatility of bitcoin”. I saw in the first 10 days how quickly I was earning money, so I bought in more. All in all, I dumped $30k into this platform.

This week the platform abruptly shut down. I’ll spare their explanation of what happened because it’s all lies and I’ve realized it’s a scam. Basically they closed the lending platform, converted all of our outstanding loans to their Bitconnect coin at what looks like a good exhbage rate (would be no loss if the coin actually held the value they “converted” it to), but then that Bitconnect coin dropped from $363 to $5. Now it’s around $20. The people who run the platform are on the run. Class action lawsuits are already starting. There are legal battles coming.

But I know it’s gone. $30k down the toilet.

I’ve learned my lesson. It was an expensive lesson. I need to stick to my plan through thick and thin.

I don’t know why I’m sharing my story. I guess to warn/teach others. I guess it also helps to get it out and talk about it.

mrpotatoheadsays
Posts: 223
Joined: Fri Mar 16, 2012 2:36 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by mrpotatoheadsays » Sat Jan 20, 2018 10:28 am

Your Boglehead membership has been revoked.

User avatar
Tycoon
Posts: 1273
Joined: Wed Mar 28, 2012 7:06 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by Tycoon » Sat Jan 20, 2018 10:29 am

I hope you are young.
Appeal to Pity:When pity is envoked to support a statement | Appeal to Popular Sentiment:Appealing to unrelated prejudices and attitudes | Hasty Generalization:Too little evidence to support the conclusion

SLHI
Posts: 24
Joined: Mon Oct 03, 2016 10:40 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by SLHI » Sat Jan 20, 2018 10:36 am

Stinks man. Thanks for sharing your experience with us. I hope future me won't get enticed into the same mistake.

Grt2bOutdoors
Posts: 19297
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Lost money through Bitconnect scam - learned my lesson

Post by Grt2bOutdoors » Sat Jan 20, 2018 10:37 am

Did you tell your wife?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

User avatar
Strayshot
Posts: 395
Joined: Thu Mar 05, 2015 8:04 am
Location: New Mexico

Re: Lost money through Bitconnect scam - learned my lesson

Post by Strayshot » Sat Jan 20, 2018 10:38 am

If you want to feel better, ask your coworkers how much they lost. Everything is relative!

Appreciate the story, as it is actionable to remind folks to stay the course and a good reminder that nearly everything related to “cryptocurrency” is a scam with no real value, including the currencies themselves.

Just_For_Jenna
Posts: 49
Joined: Sat Aug 31, 2013 5:52 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by Just_For_Jenna » Sat Jan 20, 2018 10:40 am

mrpotatoheadsays wrote:
Sat Jan 20, 2018 10:28 am
Your Boglehead membership has been revoked.
I know. I have to earn my own trust back.

Just_For_Jenna
Posts: 49
Joined: Sat Aug 31, 2013 5:52 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by Just_For_Jenna » Sat Jan 20, 2018 10:40 am

Tycoon wrote:
Sat Jan 20, 2018 10:29 am
I hope you are young.
34

Just_For_Jenna
Posts: 49
Joined: Sat Aug 31, 2013 5:52 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by Just_For_Jenna » Sat Jan 20, 2018 10:42 am

Strayshot wrote:
Sat Jan 20, 2018 10:38 am
If you want to feel better, ask your coworkers how much they lost. Everything is relative!

Appreciate the story, as it is actionable to remind folks to stay the course and a good reminder that nearly everything related to “cryptocurrency” is a scam with no real value, including the currencies themselves.
Most lost a whole lot more than me. One of my close business partners “earned” about $350k in the past six months but kept rolling it back into the platform so he’s down over $250k of his own money.

Just_For_Jenna
Posts: 49
Joined: Sat Aug 31, 2013 5:52 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by Just_For_Jenna » Sat Jan 20, 2018 10:43 am

Grt2bOutdoors wrote:
Sat Jan 20, 2018 10:37 am
Did you tell your wife?
Of course

User avatar
Tycoon
Posts: 1273
Joined: Wed Mar 28, 2012 7:06 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by Tycoon » Sat Jan 20, 2018 10:45 am

Just_For_Jenna wrote:
Sat Jan 20, 2018 10:40 am
Tycoon wrote:
Sat Jan 20, 2018 10:29 am
I hope you are young.
34
There is time to recover. It's a tough way to learn a leason though.
Appeal to Pity:When pity is envoked to support a statement | Appeal to Popular Sentiment:Appealing to unrelated prejudices and attitudes | Hasty Generalization:Too little evidence to support the conclusion

User avatar
arcticpineapplecorp.
Posts: 3334
Joined: Tue Mar 06, 2012 9:22 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by arcticpineapplecorp. » Sat Jan 20, 2018 10:46 am

i'm sorry you didn't read my post from December 17, 2017 before putting money into bitconnect:

viewtopic.php?t=234790

If you had read my post, would you have stayed away or not? The answer to that tells you if you will overlook things that are too good to be true for fear of missing out.

As it turns out this was one ponzi that crashed and burned out fairly quickly but mostly because of regulators and states filing cease and desist orders.

For those not familiar with what's gone on with bitconnect read more here:

https://www.coindesk.com/bitconnect-inv ... -drops-90/

There's investing, and then speculating. Very important to understand the difference.
"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

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by dbr » Sat Jan 20, 2018 10:49 am

arcticpineapplecorp. wrote:
Sat Jan 20, 2018 10:46 am
i'm sorry you didn't read my post from December 17, 2017 before putting money into bitconnect:

viewtopic.php?t=234790

If you had read my post, would you have stayed away or not? The answer to that tells you if you will overlook things that are too good to be true for fear of missing out.

As it turns out this was one ponzi that crashed and burned out fairly quickly but mostly because of regulators and states filing cease and desist orders.

For those not familiar with what's gone on with bitconnect read more here:

https://www.coindesk.com/bitconnect-inv ... -drops-90/

There's investing, and then speculating. Very important to understand the difference.
I would have said there is speculating and then falling for a criminal scam and that it is important to understand the difference.

Nate79
Posts: 3577
Joined: Thu Aug 11, 2016 6:24 pm
Location: Delaware

Re: Lost money through Bitconnect scam - learned my lesson

Post by Nate79 » Sat Jan 20, 2018 10:50 am

It's been called a scam for quite some time. Shouldn't come as a surprise.

MoonOrb
Posts: 959
Joined: Thu Jan 24, 2013 6:58 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by MoonOrb » Sat Jan 20, 2018 10:51 am

mrpotatoheadsays wrote:
Sat Jan 20, 2018 10:28 am
Your Boglehead membership has been revoked.
I’d rather reserve this sanction for people who act like jerks and kick people when they’re down.

Just_For_Jenna
Posts: 49
Joined: Sat Aug 31, 2013 5:52 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by Just_For_Jenna » Sat Jan 20, 2018 10:54 am

arcticpineapplecorp. wrote:
Sat Jan 20, 2018 10:46 am
i'm sorry you didn't read my post from December 17, 2017 before putting money into bitconnect:

viewtopic.php?t=234790

If you had read my post, would you have stayed away or not? The answer to that tells you if you will overlook things that are too good to be true for fear of missing out.

As it turns out this was one ponzi that crashed and burned out fairly quickly but mostly because of regulators and states filing cease and desist orders.

For those not familiar with what's gone on with bitconnect read more here:

https://www.coindesk.com/bitconnect-inv ... -drops-90/

There's investing, and then speculating. Very important to understand the difference.
I wish I had seen your post. I found it this morning searching around this forum. I don’t know why I didn’t do more research. It hurts.

slimshady
Posts: 66
Joined: Sun Aug 12, 2012 8:48 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by slimshady » Sat Jan 20, 2018 10:55 am

Thanks for sharing. I need to now share this with several close friends who have suggested I "invest" with them.

mptfan
Posts: 4715
Joined: Mon Mar 05, 2007 9:58 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by mptfan » Sat Jan 20, 2018 10:56 am

Kudos to you for openly admitting your mistake. Everyone makes mistakes, but not everyone is mature enough and brave enough to admit to them. I'm sorry it happened to you, but in the long run the experience will serve you well by preventing you from making future similar mistakes. Good luck.

bgf
Posts: 633
Joined: Fri Nov 10, 2017 9:35 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by bgf » Sat Jan 20, 2018 10:57 am

Just_For_Jenna wrote:
Sat Jan 20, 2018 10:25 am
I’ve been living the Boglehead life for the past 6-7 years. Three fund portfolio and have stuck to the plan. I’ve also made a lot of money so my net worth has risen substantially from income and investments. More money just meant more savings and I’ve also been paying down my mortgage.

Until January 1st of this year.

I’ve been watching the crypto game from the sidelines for some time. I’ve seen Bitcoin go up and down, and I looked at it like I look at individual stocks - is not for me, index funds are my strategy. However I’ve watched some coworkers, all of whom I respect very much, talk about and show their investments in this Bitconnect platform sky rocket. None of them were recruiting me. However I finally decided to give it a shot. I took some money, above and beyond my normal savings and investment goals, and bought into the platform. It paid a daily interest rate based on the “bitcoin trading bots and the volatility of bitcoin”. I saw in the first 10 days how quickly I was earning money, so I bought in more. All in all, I dumped $30k into this platform.

This week the platform abruptly shut down. I’ll spare their explanation of what happened because it’s all lies and I’ve realized it’s a scam. Basically they closed the lending platform, converted all of our outstanding loans to their Bitconnect coin at what looks like a good exhbage rate (would be no loss if the coin actually held the value they “converted” it to), but then that Bitconnect coin dropped from $363 to $5. Now it’s around $20. The people who run the platform are on the run. Class action lawsuits are already starting. There are legal battles coming.

But I know it’s gone. $30k down the toilet.

I’ve learned my lesson. It was an expensive lesson. I need to stick to my plan through thick and thin.

I don’t know why I’m sharing my story. I guess to warn/teach others. I guess it also helps to get it out and talk about it.
Psychologically it is incredibly difficult to do nothing when coworkers, family, friends are making money. What's worse, being 'rationally conscious' of this doesn't always work. We think and act emotionally.

I have avoided the bitcoin mania, but I often find myself comparing financials in other ways even though I know it's pointless and only harmful. Its very difficult to NOT do it though.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

arsenalfan
Posts: 659
Joined: Mon Dec 09, 2013 12:26 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by arsenalfan » Sat Jan 20, 2018 11:01 am

Thanks for sharing your story. I think it helps a lot of us tempted to do things that deviate from the plan.
I feel honest mistakes are worth publishing, as much as our successes.

There is a ton of Fear Of Missing Out FOMO about crypto.

Full disclosure I have some speculation money in litecoin - it is interesting to watch, treating it like my fantasy football team and seeing what happens.

I've considered making the demotivationals "mistake" poster my signature, I've made so many investing mistakes!

https://cdn.shopify.com/s/files/1/0535/ ... 1416776264

User avatar
StevieG72
Posts: 835
Joined: Wed Feb 05, 2014 9:00 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by StevieG72 » Sat Jan 20, 2018 11:04 am

Thanks for sharing your experience.

We can learn from others mistakes.

Hopefully you will recover some money in the future and the folks responsible for this failure will be held responsible.
Fools think their own way is right, but the wise listen to others.

lostdog
Posts: 1241
Joined: Thu Feb 04, 2016 2:15 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by lostdog » Sat Jan 20, 2018 11:05 am

I am sorry this happened to you. You learned your lesson and will now stay the course.
Last edited by lostdog on Sat Jan 20, 2018 11:06 am, edited 2 times in total.

Just_For_Jenna
Posts: 49
Joined: Sat Aug 31, 2013 5:52 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by Just_For_Jenna » Sat Jan 20, 2018 11:07 am

I’m ashamed and embarrassed. I (thought I) knew better.

This was money from vesting stock. I knew enough to not hold individual stock especially from the company that employs me. I normally add it to my Vanguard taxable account according to my asset allocation plan.

I have more stock vesting. I have a high income. I will make it back. Many lost their life savings. Thankfully this was money I could afford to lose.

It still stings. A lot.

nasrullah
Posts: 152
Joined: Fri Feb 10, 2017 11:40 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by nasrullah » Sat Jan 20, 2018 11:30 am

mrpotatoheadsays wrote:
Sat Jan 20, 2018 10:28 am
Your Boglehead membership has been revoked.
You have the users mixed up.
"We have a lot to do, and very little time, so we must work slowly." Liviu Ciulei | | Thanks vineviz (https://www.bogleheads.org/forum/memberlist.php?mode=viewprofile&u=134698) for the quote.

User avatar
arcticpineapplecorp.
Posts: 3334
Joined: Tue Mar 06, 2012 9:22 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by arcticpineapplecorp. » Sat Jan 20, 2018 11:30 am

dbr wrote:
Sat Jan 20, 2018 10:49 am
arcticpineapplecorp. wrote:
Sat Jan 20, 2018 10:46 am
i'm sorry you didn't read my post from December 17, 2017 before putting money into bitconnect:

viewtopic.php?t=234790

If you had read my post, would you have stayed away or not? The answer to that tells you if you will overlook things that are too good to be true for fear of missing out.

As it turns out this was one ponzi that crashed and burned out fairly quickly but mostly because of regulators and states filing cease and desist orders.

For those not familiar with what's gone on with bitconnect read more here:

https://www.coindesk.com/bitconnect-inv ... -drops-90/

There's investing, and then speculating. Very important to understand the difference.
I would have said there is speculating and then falling for a criminal scam and that it is important to understand the difference.
Everyone knows something is a scam in hindsight. Quite frankly it doesn't really matter if the outcome is the same. In 1998 you might have admitted putting money into Enron was speculating (though people thought they were "investing" in Enron). By 2002 everyone knows Enron was a criminal scam. Semantics, really. The point is understanding that anything you speculate with can go to $0. Do you think the three fund portfolio will go to $0? (and yes, technically bitconnect hasn't gone to $0. But it might. And that's the point to understanding the difference between speculating and investing).

By the way, to the OP look on the brightside...now you have capital losses that you can harvest to offset capital gains, or $3000 of ordinary income for the next decade. Not all is lost if you use the loss to your tax advantage.

By the way, I actually learned about bitconnect from another's post here at bogleheads on 10/8/17, see below (that was before my post from December). That's how I learned about it and tried to warn my neighbrors against it, to no avail.

viewtopic.php?t=229346

To the OP, I'm glad you learned your lesson. Now get back to bogleheading.
Last edited by arcticpineapplecorp. on Sat Jan 20, 2018 11:40 am, edited 3 times in total.
"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

nasrullah
Posts: 152
Joined: Fri Feb 10, 2017 11:40 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by nasrullah » Sat Jan 20, 2018 11:34 am

Just_For_Jenna wrote:
Sat Jan 20, 2018 10:25 am
I don’t know why I’m sharing my story. I guess to warn/teach others. I guess it also helps to get it out and talk about it.
Thanks for sharing your story with us. It's a painful lesson to learn, but fortunately for you you'll be okay. Write down the story and keep it with your IPS. Create a positive out of this. Long term you'll be in a much better place because of it.
"We have a lot to do, and very little time, so we must work slowly." Liviu Ciulei | | Thanks vineviz (https://www.bogleheads.org/forum/memberlist.php?mode=viewprofile&u=134698) for the quote.

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by dbr » Sat Jan 20, 2018 11:37 am

arcticpineapplecorp. wrote:
Sat Jan 20, 2018 11:30 am
dbr wrote:
Sat Jan 20, 2018 10:49 am
arcticpineapplecorp. wrote:
Sat Jan 20, 2018 10:46 am
i'm sorry you didn't read my post from December 17, 2017 before putting money into bitconnect:

viewtopic.php?t=234790

If you had read my post, would you have stayed away or not? The answer to that tells you if you will overlook things that are too good to be true for fear of missing out.

As it turns out this was one ponzi that crashed and burned out fairly quickly but mostly because of regulators and states filing cease and desist orders.

For those not familiar with what's gone on with bitconnect read more here:

https://www.coindesk.com/bitconnect-inv ... -drops-90/

There's investing, and then speculating. Very important to understand the difference.
I would have said there is speculating and then falling for a criminal scam and that it is important to understand the difference.
Everyone knows something is a scam in hindsight. Quite frankly it doesn't really matter if the outcome is the same. In 1998 you might have admitted putting money into Enron was speculating (though people thought they were "investing" in Enron). By 2002 everyone knows Enron was a criminal scam. Semantics, really. The point is understanding that anything you speculate with can go to $0. Do you think the three fund portfolio will go to $0? (and yes, technically bitconnect hasn't gone to $0. But it might. And that's the point to understanding the difference between speculating and invseting).
I see your point. But I still think people need to have their scam detector on high alert. The difference is that speculation can go to zero or it can pay off or it can be a wash. A scam will go to zero nearly for sure and will not allow a gain to anyone except as a ploy.

Luckywon
Posts: 197
Joined: Tue Mar 28, 2017 10:33 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by Luckywon » Sat Jan 20, 2018 11:37 am

I was around your age when there was a frenzy in tech stocks. Everyone was bragging about tremendous returns buying internet stocks. It was very similar to the Bitcoin frenzy that is going on now.
I jumped on the bandwagon, picking hot stocks that I heard about from friends, internet, wherever. Somehow, over the years 1999 and 2000 I actually managed to lose money. I remember feeling so embarrassed having to show my capital losses to my accountant in years where everyone else, as far as I knew, was making a fortune. This was capped off in 2001 when I lost most of my money in a stock named JDSU.

A little bit after that time, I started buying index funds, and basically following Boglehead principles. I've made a good salary, and now, at age 52, feel financially secure and could retire today very comfortably. Anyway, my point is that over the next 25 years, there are so many major factors that are going to determine where you stand, such as your salary, how are you invest from this point forward, how you manage your expenses. What just happened to you will have just been a minor hiccup.

In fact the best time to have made this mistake is early in your investing career, like I did, when you did not have that much to lose compared to what you will have later on in life You are now unlikely to repeat this mistake. From glancing at your posts you sound like a very intelligent and motivated person with all the qualities for great financial success. Keep this in mind and good luck going forward.

theplayer11
Posts: 506
Joined: Tue Jul 22, 2014 8:55 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by theplayer11 » Sat Jan 20, 2018 11:38 am

I was your age during the dot com bubble. I had no idea about stocks and investing except that during that time it seemed everything went up. I was up about $300K and lost it all, ended up losing about $150K of my own money. Every year at tax time I'm still reminded with my $3000 capital loss deduction.
I remember the stock symbols well..CYBR, IFLY.....and some internet gaming company called Starnet.
From that point on it was all mutual funds, then index funds once I found this site. I sleep well at night now.

An example: I remember buying a stock on a Friday at $8 and it opened Monday at $16. Crazy times.

lostdog
Posts: 1241
Joined: Thu Feb 04, 2016 2:15 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by lostdog » Sat Jan 20, 2018 11:44 am

dbr wrote:
Sat Jan 20, 2018 11:37 am
arcticpineapplecorp. wrote:
Sat Jan 20, 2018 11:30 am
dbr wrote:
Sat Jan 20, 2018 10:49 am
arcticpineapplecorp. wrote:
Sat Jan 20, 2018 10:46 am
i'm sorry you didn't read my post from December 17, 2017 before putting money into bitconnect:

viewtopic.php?t=234790

If you had read my post, would you have stayed away or not? The answer to that tells you if you will overlook things that are too good to be true for fear of missing out.

As it turns out this was one ponzi that crashed and burned out fairly quickly but mostly because of regulators and states filing cease and desist orders.

For those not familiar with what's gone on with bitconnect read more here:

https://www.coindesk.com/bitconnect-inv ... -drops-90/

There's investing, and then speculating. Very important to understand the difference.
I would have said there is speculating and then falling for a criminal scam and that it is important to understand the difference.
Everyone knows something is a scam in hindsight. Quite frankly it doesn't really matter if the outcome is the same. In 1998 you might have admitted putting money into Enron was speculating (though people thought they were "investing" in Enron). By 2002 everyone knows Enron was a criminal scam. Semantics, really. The point is understanding that anything you speculate with can go to $0. Do you think the three fund portfolio will go to $0? (and yes, technically bitconnect hasn't gone to $0. But it might. And that's the point to understanding the difference between speculating and invseting).
I see your point. But I still think people need to have their scam detector on high alert. The difference is that speculation can go to zero or it can pay off or it can be a wash. A scam will go to zero nearly for sure and will not allow a gain to anyone except as a ploy.
Total Market Index and Total International Index going to $0 there would have to be a complete world economy meltdown or worse.

User avatar
arcticpineapplecorp.
Posts: 3334
Joined: Tue Mar 06, 2012 9:22 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by arcticpineapplecorp. » Sat Jan 20, 2018 11:44 am

Just_For_Jenna wrote:
Sat Jan 20, 2018 10:54 am
arcticpineapplecorp. wrote:
Sat Jan 20, 2018 10:46 am
i'm sorry you didn't read my post from December 17, 2017 before putting money into bitconnect:

viewtopic.php?t=234790

If you had read my post, would you have stayed away or not? The answer to that tells you if you will overlook things that are too good to be true for fear of missing out.

As it turns out this was one ponzi that crashed and burned out fairly quickly but mostly because of regulators and states filing cease and desist orders.

For those not familiar with what's gone on with bitconnect read more here:

https://www.coindesk.com/bitconnect-inv ... -drops-90/

There's investing, and then speculating. Very important to understand the difference.
I wish I had seen your post. I found it this morning searching around this forum. I don’t know why I didn’t do more research. It hurts.
I'm sorry it hurts. It will heal in time, believe me.

But this is another interesting point you bring up about doing "more research". Do people need to do "more research" on the three fund portfolio? Nope.

If you buy individual stocks can't you always "do more research"? Of course. That's a difference between investing and speculating. If you speculate with stocks or anything else, you can always do more research, second guess, etc. You don't do any of that with the three fund portolio because you get what the market gives, good or bad. The main decision you have is about asset allocation (percentage of stocks/bonds). Once that's made you just invest. No more research to do really. Simple. It works. So many people want to make investing more complicated than it needs to be. Or they think they can do better. That's really what bitconnect speculators were doing. They believed they found a way to beat the market. They were smarter somehow than everyone else. There's nothing wrong with being average as an investor. The market gives a fair, decent return over time to anyone who wants it. Those who think they can do better will likely do worse over time. People don't want to believe that. They think they're special, different from everyone else or above average. The sooner we realize we're not, the sooner we start doing better. Being average means getting the average return of the market. That average return of the market has happened to do BETTER than the average return of all investors. Mostly because of speculation, market timing, high costs (taxes, turnover, commissions), etc.
Last edited by arcticpineapplecorp. on Sat Jan 20, 2018 11:49 am, edited 2 times in total.
"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

WillRetire
Posts: 94
Joined: Mon Jun 05, 2017 10:01 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by WillRetire » Sat Jan 20, 2018 11:48 am

Thank you for sharing your story. Very interesting & revealing regarding crypto trading platform.

You are relatively young. To quote the Rolling Stones: "Time is on [your] side"

Also on the bright side, you are less likely to make a financial mistake later in life when it is much much more difficult to recover from. This experience will probably lead you to stay the course in the future.

RRAAYY3
Posts: 926
Joined: Thu Jan 17, 2013 12:32 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by RRAAYY3 » Sat Jan 20, 2018 11:57 am

Remember this lesson, so you don’t enter another venture trying to “win back” your mistake and ending up in a deeper hole

I despise Bitcoin and can’t wait for it to just go away. If you bought it in 08/09, sell this BS ASAP and consider yourself lucky

Blockchain technology is valuable - Bitcoin is a FOMO driven nothing. If you’re not a sci-fi Villain or drug dealer, it should be irrelevant to you.

My friends husband “mines for Bitcoin” his electric bill runs more than he’ll likely earn from this nonsense .. it’s almost funny

User avatar
arcticpineapplecorp.
Posts: 3334
Joined: Tue Mar 06, 2012 9:22 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by arcticpineapplecorp. » Sat Jan 20, 2018 12:03 pm

RRAAYY3 wrote:
Sat Jan 20, 2018 11:57 am
Remember this lesson, so you don’t enter another venture trying to “win back” your mistake and ending up in a deeper hole

I despise Bitcoin and can’t wait for it to just go away. If you bought it in 08/09, sell this BS ASAP and consider yourself lucky

Blockchain technology is valuable - Bitcoin is a FOMO driven nothing. If you’re not a sci-fi Villain or drug dealer, it should be irrelevant to you.

My friends husband “mines for Bitcoin” his electric bill runs more than he’ll likely earn from this nonsense .. it’s almost funny

Sounds like he should invest in the electric company instead.
"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

lolbatross
Posts: 129
Joined: Thu Feb 20, 2014 10:36 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by lolbatross » Sat Jan 20, 2018 12:09 pm

arcticpineapplecorp. wrote:
Sat Jan 20, 2018 12:03 pm
[quote=RRAAYY3 post_id=3731679 time=<a href="tel:1516467432">1516467432</a> user_id=42235]

I despise Bitcoin and can’t wait for it to just go away. If you bought it in 08/09, sell this BS ASAP and consider yourself lucky

Blockchain technology is valuable - Bitcoin is a FOMO driven nothing. If you’re not a sci-fi Villain or drug dealer, it should be irrelevant to you.
If you replaced bitcoin with all other crypto coins aka [(removed) --admin LadyGeek] I would agree with your statements. BTC has no board of directors or ICO or marketing team. All other cryptos do.

In my opinion BTC is valuable and everything else is essentially a scam. Altcoins are to bitcoin what Edward jones is to vanguard.

To OP, sorry for your loss. Thank you for sharing your lesson with us.
Last edited by lolbatross on Sat Jan 20, 2018 12:11 pm, edited 1 time in total.

User avatar
F150HD
Posts: 1637
Joined: Fri Sep 18, 2015 7:49 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by F150HD » Sat Jan 20, 2018 12:10 pm

it sucks but $30k - At least the damage isn't worse. One could make that up working a PT job for a year or few....at least its 'fixable' in that regard.

Seriously waiting for the TV MOVIE on this to come about.

Just_For_Jenna
Posts: 49
Joined: Sat Aug 31, 2013 5:52 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by Just_For_Jenna » Sat Jan 20, 2018 12:20 pm

Thank you for all of the responses including those who shared their similar stories from the dot com era.

I’m done with crypto. I had a very bad 15 day “affair” from my Boglehead lifestyle and it cost me $30k.

I will make sure to turn this into a positive and never let this happen again.

It could have been much, much worse and I am thankful that it wasn’t.

Eyes on the future.

User avatar
vitaflo
Posts: 999
Joined: Sat Sep 03, 2011 3:02 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by vitaflo » Sat Jan 20, 2018 12:30 pm

In some ways you got lucky. While you lost money now, having stayed in for longer would have just roped you into even larger losses (like your coworkers).

Bitconnect is small potatoes compared to what's to come. Once people figure out that Tether is basically counterfeiting money and the Feds get involved, a lot of people are going to lose a lot of money. It will be a Mt. Gox level of implosion. It's just a matter of time.

RudyS
Posts: 1333
Joined: Tue Oct 27, 2015 10:11 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by RudyS » Sat Jan 20, 2018 12:36 pm

Just_For_Jenna wrote:
Sat Jan 20, 2018 12:20 pm
Thank you for all of the responses including those who shared their similar stories from the dot com era.

I’m done with crypto. I had a very bad 15 day “affair” from my Boglehead lifestyle and it cost me $30k.

I will make sure to turn this into a positive and never let this happen again.

It could have been much, much worse and I am thankful that it wasn’t.

Eyes on the future.
Thanks for sharing with us. $30K should prove to be a cheap lesson. Maybe you'll feel better thinking of all those who "invested" with Bernie Madpoff. LOL!! Just had spell check offer me the correction for that typo - "Ripoff"

staythecourse
Posts: 6117
Joined: Mon Jan 03, 2011 9:40 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by staythecourse » Sat Jan 20, 2018 12:40 pm

Thanks for coming and telling this story.

Your thread on your quest it to $1 million with no mortgage is inspiring. This is equally educational for many readers.

In the end the old adage of there is no shortcut to wealth is true (unless your born into it or inherit it). Just be glad you didn't drop more money into it.

Early, when I was just starting to invest I put 15k into buying into some farmland in Argentina or somewhere. Of course, I lost it all. BUT it was the best learning experience I have had up to this point.

As I have said before I WISH there was a better, i.e. active way to make more money in investing I really do, but after much time reading and looking at other options I just don't see it.

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

User avatar
vitaflo
Posts: 999
Joined: Sat Sep 03, 2011 3:02 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by vitaflo » Sat Jan 20, 2018 12:45 pm

staythecourse wrote:
Sat Jan 20, 2018 12:40 pm
As I have said before I WISH there was a better, i.e. active way to make more money in investing I really do, but after much time reading and looking at other options I just don't see it.
I have found the best active way to make more money investing is to invest in yourself.

staythecourse
Posts: 6117
Joined: Mon Jan 03, 2011 9:40 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by staythecourse » Sat Jan 20, 2018 12:50 pm

RudyS wrote:
Sat Jan 20, 2018 12:36 pm
[Maybe you'll feel better thinking of all those who "invested" with Bernie Madpoff.
For those sports fans out there this reminds of the Bonilla- Wilpon situation a classic real life lesson of the turtle- hare. For those who don't know the story...

Bobby Bonilla was a pretty good baseball player in the 90's. He was up for a contract or was renegotiating it (can't remember). He already heard all the horrible stories of ball players going broke after retiring so he decided to call his agent and ask to do something different. He wanted his next contract to be done where he deferred money where he would get paid $1 milion every July (I think) for like 30 years (forgot exact years). Sort of making his own annuity. Fred Wilpon the owner of the Mets was more then excited as it would free up more money NOW and still keep Bonilla. Mr. Wilpon thinking he was brilliant thought and did take the extra upfront money that would have gone to Bonilla and invested it in a super successful hedge fund by his close friend Bernie Madoff. He thought he could make even MORE money putting it in the hedge fund and that would easily cover all the annuity payments going forward AND produce excess returns for him.

Well we all know what happened. Mr. Wilpon lost all of that money, Madoff went to jail, and Mr. Bonilla every year get $1million dollars. Funny how old proverbs like the turtle and the hare ring true now as much as they did years ago.

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

staythecourse
Posts: 6117
Joined: Mon Jan 03, 2011 9:40 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by staythecourse » Sat Jan 20, 2018 12:52 pm

vitaflo wrote:
Sat Jan 20, 2018 12:45 pm
staythecourse wrote:
Sat Jan 20, 2018 12:40 pm
As I have said before I WISH there was a better, i.e. active way to make more money in investing I really do, but after much time reading and looking at other options I just don't see it.
I have found the best active way to make more money investing is to invest in yourself.
Correct. That is why my single BIGGEST pet peeve on this site is when a young person asks about asset allocation. It doesn't matter when compared to their own human capital. As I have said before the easiest way to get rich is to make a lot of money. Easier being rich when you are saving 200k per year hen 20k per year.

Invest in ones education in a high paying field they like is the lowest hanging fruit to financial success.

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

Whakamole
Posts: 776
Joined: Wed Jan 13, 2016 9:59 pm

Re: Lost money through Bitconnect scam - learned my lesson

Post by Whakamole » Sat Jan 20, 2018 12:55 pm

staythecourse wrote:
Sat Jan 20, 2018 12:52 pm
vitaflo wrote:
Sat Jan 20, 2018 12:45 pm
staythecourse wrote:
Sat Jan 20, 2018 12:40 pm
As I have said before I WISH there was a better, i.e. active way to make more money in investing I really do, but after much time reading and looking at other options I just don't see it.
I have found the best active way to make more money investing is to invest in yourself.
Correct. That is why my single BIGGEST pet peeve on this site is when a young person asks about asset allocation. It doesn't matter when compared to their own human capital. As I have said before the easiest way to get rich is to make a lot of money. Easier being rich when you are saving 200k per year hen 20k per year.

Invest in ones education in a high paying field they like is the lowest hanging fruit to financial success.

Good luck.
Some young people would rather throw their college savings into crypto than go to college.

Valuethinker
Posts: 36322
Joined: Fri May 11, 2007 11:07 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by Valuethinker » Sat Jan 20, 2018 1:04 pm

arcticpineapplecorp. wrote:
Sat Jan 20, 2018 11:30 am

Everyone knows something is a scam in hindsight. Quite frankly it doesn't really matter if the outcome is the same. In 1998 you might have admitted putting money into Enron was speculating (though people thought they were "investing" in Enron). By 2002 everyone knows Enron was a criminal scam. Semantics, really. T
Enron was the world's most admired company - -several years running.

Out of 32 Wall Street analysts, 30 had it as a buy. There were also credit analysts who rated it investment grade-- and credit investors don't get the upside, only the downside if it goes wrong, so they are paid to be cautious by nature.

There were a lot of people whose job it was to call Enron, who got it wrong. Plus all the acolades from leading consultancies, business school cases, sign off on the accounts by a prestigious Board of Directors plus the world's 5th largest accounting firm.

Enron then became the largest bankruptcy in corporate history to that point. Collapsing in only a very few months. Enron was fraudulent-- there were only a couple of signs that it was fraudulent (one line in the accounts, plus a long term failure of cash flow to meet earnings).

Enron was fraud. From the outside, if the accounts are rigged, fraud is quite difficult to detect.

If your point is that single stock risk is speculative, and a stock can go to zero, then I agree.

But investing in Enron shares at the time was not equivalent to buying crypto currencies, where lots of reputable analysts and investors have been saying "bubble" and "potential scam" for months or even years.

Shallowpockets
Posts: 690
Joined: Fri Nov 20, 2015 10:26 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by Shallowpockets » Sat Jan 20, 2018 1:10 pm

Hoping 2108 is a good year in the markets and you can use that 30k loss to offset your gains.
Small consolation, I know, but better then nothing.

Bitcoin is NOT like investing in the tech bubble, or Enron, gold, or stocks that crashed in 2008.
The difference here is that real stocks can be sold and bought, in the here and now. Click, and you have sold. Done. Bitcoins and crypto are traded on other nebulous platforms with delays in money movement and prices that are not reflective of the time you want to get in or out.
If Bitcoin were available to trade on the normal exchanges with market and limit prices and execution then it might be something to consider. Until that happens, I would gladly stick with my recent WYNN (100 shares) bought after start of year and up 3k+ and which I can sell out of in a simple click. Why do I even say this? Because most Bitcoin players are looking for not a good profit, but a real killing. I am sure you had visions of your 30k turning into 100k or more easily. Probably you would never have gotten out of your Bitcoin if it had been ahead by 5k. Yet that would have been greater than 10% return in perhaps a brief time frame.
Bitcoin players are anchored mentally to the big gains they have seen. Huge jumps. It is a lottery mentality. Driven by the same twisted logic that says, I won't buy a lottery ticket because the winnings are only 1 million dollars verses I will buy one because the winnings are now 100 million.
If you could day trade Bitcoin, I might do it. But that liquidity and the ability to move is essential.

Valuethinker
Posts: 36322
Joined: Fri May 11, 2007 11:07 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by Valuethinker » Sat Jan 20, 2018 1:15 pm

Just_For_Jenna wrote:
Sat Jan 20, 2018 10:25 am
I’ve been living the Boglehead life for the past 6-7 years. Three fund portfolio and have stuck to the plan. I’ve also made a lot of money so my net worth has risen substantially from income and investments. More money just meant more savings and I’ve also been paying down my mortgage.

Until January 1st of this year.

I’ve been watching the crypto game from the sidelines for some time. I’ve seen Bitcoin go up and down, and I looked at it like I look at individual stocks - is not for me, index funds are my strategy. However I’ve watched some coworkers, all of whom I respect very much, talk about and show their investments in this Bitconnect platform sky rocket. None of them were recruiting me. However I finally decided to give it a shot. I took some money, above and beyond my normal savings and investment goals, and bought into the platform. It paid a daily interest rate based on the “bitcoin trading bots and the volatility of bitcoin”. I saw in the first 10 days how quickly I was earning money, so I bought in more. All in all, I dumped $30k into this platform.

This week the platform abruptly shut down. I’ll spare their explanation of what happened because it’s all lies and I’ve realized it’s a scam. Basically they closed the lending platform, converted all of our outstanding loans to their Bitconnect coin at what looks like a good exhbage rate (would be no loss if the coin actually held the value they “converted” it to), but then that Bitconnect coin dropped from $363 to $5. Now it’s around $20. The people who run the platform are on the run. Class action lawsuits are already starting. There are legal battles coming.

But I know it’s gone. $30k down the toilet.

I’ve learned my lesson. It was an expensive lesson. I need to stick to my plan through thick and thin.

I don’t know why I’m sharing my story. I guess to warn/teach others. I guess it also helps to get it out and talk about it.
I think if you read Michael Lewis on Kahneman and Tversky, Kahneman himself, or any number of books on the psychology of gambling & addiction, you had gambling addiction on this one.

You probably had FOMO - Fear of Missing Out. And a gambler's rush.

The real lesson of this (and beating yourself up about it probably won't help) is that you have to be wary of a temptation to gamble-- because you could fall down that sinkhole again.

If you do not, then this might have been one of life's cheaper lessons (as opposed to losing your marriage, your job, your health, your freedom ....).

Glass is half full - you have paid a full price for a major life lesson. And you have years enough left to benefit from it.

Worth reading Martin Gilbert's life of Winston Churchill. The man was about the worst screwup that 20th Century British politics had. Ohh and perpetually in financial trouble (there's a fascinating book out about the wretched situation of his personal finances, there was serious concern that the government would foreclose on him for unpaid taxes *during World War 2* when he was Prime Minister).

What mattered was not that Churchill was right -- he was often catastrophically wrong and others paid a huge toll for that. Nor that he was successful-- he fell from a very great height of high office and power more than once. His political associates thought him a turncoat (true), an opportunist (true) and toxically self obsessed and vain (also true). He was an awful Prime Minister (once, the last time) as well as a great one (the first time). His famous "We shall never surrender" speech was not well received in the Parliament that day- -he was thought an indifferent speaker (especially compared to Neville Chamberlain, his immediate predecessor).

What mattered was that he got up again, and kept going forward. And there was a moment when that was all that mattered. "We fight on. We fight to win".

His statue opposite Parliament reminds us that it's possible to be a flawed human being, and still do worthwhile things. It calls to us all, "you, you can be better than you were".

(Lives of Ulysses Samuel Grant, Abraham Lincoln (who was cast into the political darkness at least once) would remind us of similar things. Lincoln of course was reviled when he was president. US Grant's tomb in upper Manhattan was almost derelict before it was renovated during the 1960s -- he's not a President Americans remember well. Yet there lies his body, with busts of his generals looking out upon it, and there lies one of the American Republic's greatest generals. A man who took the tools he had at hand, the Union Army with all its flaws and foibles, and wielded it in his earnest fashion, almost like a carpenter building a house, to save the young Republic. It's an interesting place to reflect on great men)

User avatar
M_to_the_G
Posts: 538
Joined: Mon Jan 21, 2013 9:57 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by M_to_the_G » Sat Jan 20, 2018 1:26 pm

Wowzers... well, the lesson here isn't just "don't fall for scams." The other -- and perhaps bigger -- lesson is "don't invest in hot trends." The time to get into bitcoin was in 2013 when it was selling at $72 per coin, i.e. when there wasn't much buzz around bitcoin. If you had invested $100,000 in bitcoin back then and sold it when the price skyrocketed, well... do the math. Here's a simple rule of thumb: anything that has become so prominent in the financial "noise" world that even your aunt Edna is talking about it with her knitting club is probably something to avoid.

Apropos, if there is a third lesson, it might be "don't think about what could have beens." If I had known Mark Zuckerberg when he was in his college dorm room at Harvard in 2004 and I had given him $30,000 for just 1% of any company he started that eventually went public... But alas, that's pointless, right? It's the same as wistfully wondering "what could have been" if you had known the power ball numbers the day before they were drawn. Stay the course, invest wisely, don't let the "noise" influence you (whether coming from the financial press or from your colleagues), and don't think about what could have been.

Reading helps tremendously to stay the course. Someone above recommended some books. The operative word here is books. I see "Bogleheads" posting here all the time asking for support to stay the course. I strongly suspect that they just don't read enough books. If you read all the books in the Bill Bernstein "If You Can" reading list, you will never stray off the course again. Read "The Most Important Thing" by Howard Marks. In it, you will see how he resisted the intense pressure to change his investment strategy during market frenzies, when his investors were blowing his phone up, when fools appeared to be geniuses, when people were predicting that stocks would double on their IPO -- but no, they tripled -- when he appeared to be the dolt. Ad infinitum. Learn from the wisdom of smart and thoughtful people through reading the books they write. Books. Don't read magazines, don't watch TV, and don't listen to people standing around a water cooler at work.

I somewhat disagree with the above analysis of Enron, which appears to imply that no one could have known what was going on. People could have easily asked the question, "Where are your profits coming from?" No one asked that question... in part because they allowed themselves to be ensorcelled by the shiny skyscrapers, the regal businessmen in their smart suits with their Ivy League pedigrees, the awards, etc. But they didn't ask the key question, "Where are your profits coming from?" or didn't ask it insistently enough.
"It’s basically the plot of 'Charlie and the Chocolate Factory.' If you stick around, doing nothing, while everyone around you ****s up, you’re going to win big." - John Oliver

TheHouse7
Posts: 323
Joined: Fri Jan 13, 2017 2:40 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by TheHouse7 » Sat Jan 20, 2018 1:39 pm

Thank you OP, we all make mistakes, it is a nice reminder that I'm not the only one making them. :oops:
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.

gowest
Posts: 40
Joined: Sun Nov 22, 2009 10:32 am

Re: Lost money through Bitconnect scam - learned my lesson

Post by gowest » Sat Jan 20, 2018 1:44 pm

mptfan wrote:
Sat Jan 20, 2018 10:56 am
Kudos to you for openly admitting your mistake. Everyone makes mistakes, but not everyone is mature enough and brave enough to admit to them. I'm sorry it happened to you, but in the long run the experience will serve you well by preventing you from making future similar mistakes. Good luck.
+1

Don't dwell on it. Just learn from it and move on. Good luck!

Locked