Not too long ago, a reader sent me a message letting me know that someone had created a fake Instagram account of me and was DMing people telling them to invest in some crypto scheme. I’m not a big-time influencer by any means, so it’s a bit flattering that some scammer thought I was a big enough personality to work my persona into their scam.
Interestingly enough though, I write about different ways to make extra money, and some of the things I do – like opening new credit cards and bank accounts to earn signup bonuses – do seem sort of sketchy. It’s not completely unbelievable that maybe I could be into crypto.
So, in the interest of completeness, let me make things clear. I will never recommend crypto! I have personal objections to it, including the following:
- I think it’s a terrible use of energy and resources (Bitcoin, for example, uses more energy than entire countries).
- It has no value beyond speculative value – i.e. the only reason you are buying crypto is with the hope that someone else will pay more for it later.
- I don’t like how it seems rife with scams and how inherently, much of crypto seems designed to prey on the uninformed and desperate (for example, see the case of the “Cryptoqueen,” who scammed investors out of $4 billion and then disappeared).
Needless to say, if you ever see me promoting crypto or some crypto exchange, you should assume I’ve been hacked or someone has created a fake account of me.
But even beyond my personal objections to crypto, the fact is, for almost everyone, the inherent risk that comes with crypto simply isn’t needed. Indeed, for almost everyone, doing anything outside of normal investing and saving isn’t necessary.
Crypto gets its allure from how much you can seemingly make from it – it’s like winning the lottery if you get in at the right time. And while we all want to hit home runs, the truth is, we don’t need home runs to win at most things in life.
You Don’t Need Crypto To Win At Investing
Even if I’m wrong about crypto and it’s actually the best thing around, the simple fact is, investing in crypto is completely unnecessary to a successful investing career.
I think that’s something that a lot of people get wrong about investing. We’ve all seen those articles about how much money you could have if you’d invested in Apple or Amazon stock long ago. Or when you see stories about how much your Bitcoin would be worth now if you’d had the foresight to invest thousands into it back when it was worth nothing in 2010. It makes you think that’s what investing is about – finding those big winners that can set you up for life.
Articles like these are a disservice to most people, giving people an incorrect view of what investing is really about. It’s not about finding that needle in the haystack and making it big with that one breakout stock (or breakout cryptocurrency, in this case).
Some people might hit it big. And more power to them. But the number of people who hit it big by picking their one amazing stock or getting in at that right time with some crypto or NFT is infinitesimally small – probably as realistic as saying you’ll be an NBA player or a Hollywood movie star. Some people might pull it off. The vast majority won’t.
The great thing is you don’t need any big wins to win at investing. Look at the math. The only thing you really have to do is save a decent amount of money over time, stay consistent, and do it for a long time. The earlier you start saving and investing, the less money it takes also. This is all you actually need to win in your investing life. Finding some random thing that hits it big is nice – but it’s not required.
Winning At Investing Is A Long Game
Investing isn’t a get-rich-quick scheme. It’s a long game – and the formula to win is pretty simple. Here’s how you win with money (at least when it comes to investing and saving money).
1. Buy Index Funds And Do It For A Long Time. Buying index funds isn’t as glamorous as someone saying they’re a millionaire because they invested in Bitcoin back in 2010 (how many people even fit in this category?).
But buying index funds (things like the Vanguard Total Stock Market Index Fund or Vanguard S&P 500 Index Fund) is about as safe a bet as you can get when it comes to investing your hard-earned money. And importantly, it’s all you really need to do.
Ignore the stuff you see from influencers on YouTube or Tik Tok. Those are distractions that are designed to take your money. You don’t need any of that.
2. Keep Costs Low. Beyond investing correctly, the next most important thing is to keep your costs low. Fortunately, these days, it’s so easy to invest in low-cost index funds that it baffles me why anyone would invest in anything else more expensive.
If you need convincing on this point, you should read John Bogle’s The Little Book of Common Sense Investing. It makes the case for index funds and low-cost investing in a far more convincing manner than I ever could. The book is so short and easy to read you can read the whole thing in a day. If you read that book and still think you’re smarter than Bogle, then I don’t really know what to say.
3. Create Or Build Your Own Assets. Finally, if you do want to take risks and have some more fun with your investments, don’t give your money away to make someone else rich. Instead, put your money into creating your own businesses or assets. Things like a business or real estate can have huge, outsized returns with the added advantage that they are things with value that you control.
I think this is the much better way to go for home runs if going for home runs is something you simply have to do. Instead of investing and hoping things go your way, you can use your money to create something that is in your hands.
Sure, there’s no guarantee that your business will work out, but if boring investing isn’t enough for you, then this is what I recommend. If things don’t work out, at least you tried and had some control over whether you succeeded or failed.
We’ve all fallen for the myth of overnight success. That all it takes is one lucky break to make it big.
Interestingly enough, it’s the way I thought about this blog for a long time. I thought the secret to blogging was getting discovered by some big publication. If just somehow, some big newspaper would notice me, this blog would make it big.
It turns out that’s not how you make it with most things in life. It’s not about that one big win. It’s about consistently putting in the work and having the patience to keep going over the long term. It’d be great if we could win the lottery or find that diamond in the rough. But that’s not really how the world works.