The wealth-building thread

[GD Fan]

Thanks! Yep, live in Australia, and I am 32.

Great portfolio at 32 y.o. Good on ya, mate.

 

[Vince2]

So far, wealth has been understood as financial assets in this post. Don't confuse it with happiness. For many, accumulating wealth is a great source of stress, and highly overrated. Quality of close relationships and engagement in meaningful activities is a more reliable investment in wealth that pays off in many ways.

 

[Chromatischism]

So far, wealth has been understood as financial assets in this post. Don't confuse it with happiness. For many, accumulating wealth is a great source of stress, and highly overrated. Quality of close relationships and engagement in meaningful activities is a more reliable investment in wealth that pays off in many ways.

True, but sometimes it is hard to get there until you can afford to leave your job or at least work at one that doesn't dominate your life. Lots of complexity there...different paths you can end up on due to family and financial status, neighborhood, life choices...that is a whole different thread.

 

[Jdunk54nl]

So far, wealth has been understood as financial assets in this post. Don't confuse it with happiness. For many, accumulating wealth is a great source of stress, and highly overrated. Quality of close relationships and engagement in meaningful activities is a more reliable investment in wealth that pays off in many ways.

Money definitely isn't an end all to happiness, but it does relieve stress. After a certain point of income and wealth, money stress is gone. I definitely no longer stress about money and that has brought me a lot more happiness in marriage, my job, and life in general. But more money at this point isn't going to change the above much more. Now it's changing the family tree for finances so our future generations can start off with that level of happiness.

Also, one of the best things about building wealth is the giving aspect. That is the best thing my wife and I have started doing way more of the past couple of years. The amount of money and time we can give now is a lot more and it grows more and more each year. Just remember, investigate and learn about any charity you are giving too. Just because it is a non profit doesn't mean it is legit!

 

[raistlin65]

This is the most boomer take I've ever read.

Crypto has been around for over a decade, is being adopted by governments, banks and MNC's.

Odds are you know someone who never has to work again because of crypto.

If you're not bullish on crypto you're willfully ignorant.

AOL was a great stock. Until it wasn't.

One can be bullish on the "idea" of crypto. But choosing a winner for long-term investing is quite another proposition.

 

[raistlin65]

Honestly, what does anyone have to lose by sharing what they are worth? People look up peoples net worth online all the time.
You can gain interest and teach others how you did it. That right there is worth whatever risk there is, although I really don't know what risk there is.....

Have your identity stolen, and you will understand why you don't want to put yourself out there as a target.

 

[raistlin65]

Everything you need: https://bogleheads.org/

Yep. Good resource.

For those who are still convinced they are the ones who can beat the s&p 500 or total stock market index in the long run, check out Daniel Kahneman's Thinking Fast and Slow on cognitive bias. It explains why humans are so bad at doing that.

And if you haven't read it, you need to read it anyway as an objectivist.

 

[Jdunk54nl]

Have your identity stolen, and you will understand why you don't want to put yourself out there as a target.

How is a picture like that going to increase the odds of that happening?

Also my identity theft insurance covers 100% of the cost and they do all of the work to fix identity theft issues. All I have to do is call them.

I still would prefer to not have to use it, but I'm not understanding the concern here. It's a picture of a number on a random internet site with very little identifiable information. The amount of work required to use that to steal my identity wouldn't be worth the effort for someone into stealing identities.

 

[preload]

Define "traders". From what I understand many traders are 100% cash by market close.

Well that would be a "day trader!" But sure. I'd be curious what the tax-equivalent return of a day trader trading (trading x% of total investment assets) is vs going all-in with a total stock market index fund taxed as a LTCG. And that's not even considering the risk-adjusted return.

 

[samsa]

This is the most boomer take I've ever read.

Crypto has been around for over a decade, is being adopted by governments, banks and MNC's.

Odds are you know someone who never has to work again because of crypto.

If you're not bullish on crypto you're willfully ignorant.

Back in the early days, bitcoin was going to revolutionize electronic settlement networks. If Joe wanted to pay Al, it would be easier/cheaper/(fill in the blank) to do so via the Bitcoin network than via ACH or SWIFT or Visa or whatever. Nowadays, crypto is mostly viewed as an asset that will appreciate in value.

These two are completely antithetical to each other.

If Joe thinks his bitcoins (or monero or whatever) are going to appreciate in value, he would much prefer to hold onto them, rather than to use them to pay Al. Conversely, to be useful for settling accounts, you need a token that's stable in value, not one which fluctuates wildly. (Don't bother bringing up "stablecoin(s)". Every single one of those is either a scam or a flop (or both). In any case, they are irrelevant to this discussion of crypto as an "investment" vehicle.)

The bottom line is the crypto (the investment vehicle) is an asset that will appreciate in value because --- at any given moment --- there are people who are willing to buy it in the expectation that it will rise further in value. Unlike gold or pork bellies, it's not actually useful for anything (especially not for its original ostensible purpose: a token for electronic settlement).

It will keep going up as long as there's another sucker who thinks it will go yet higher. Which, I guess, is why there are folks here eagerly talking it up to the "boomers".

 

[preload]

So far, wealth has been understood as financial assets in this post. Don't confuse it with happiness. For many, accumulating wealth is a great source of stress, and highly overrated. Quality of close relationships and engagement in meaningful activities is a more reliable investment in wealth that pays off in many ways.

I'll take the money.







Okay fine, I supposed you're right.

 

[preload]

Back in the early days, bitcoin was going to revolutionize electronic settlement networks. If Joe wanted to pay Al, it would be easier/cheaper/(fill in the blank) to do so via the Bitcoin network than via ACH or SWIFT or Visa or whatever. Nowadays, crypto is mostly viewed as an asset that will appreciate in value.

These two are completely antithetical to each other.

If Joe thinks his bitcoins (or monero or whatever) are going to appreciate in value, he would much prefer to hold onto them, rather than to use them to pay Al. Conversely, to be useful for settling accounts, you need a token that's stable in value, not one which fluctuates wildly. (Don't bother bringing up "stablecoin(s)". Every single one of those is either a scam or a flop (or both). In any case, they are irrelevant to this discussion of crypto as an "investment" vehicle.)

The bottom line is the crypto (the investment vehicle) is an asset that will appreciate in value because --- at any given moment --- there are people who are willing to buy it in the expectation that it will rise further in value. Unlike gold or pork bellies, it's not actually useful for anything (especially not for its original ostensible purpose: a token for electronic settlement).

It will keep going up as long as there's another sucker who thinks it will go yet higher. Which, I guess, is why there are folks here eagerly talking it up to the "boomers".

To be clear, the time to be bullish on any crypto is before everyone else is bullish on it.

All of what you wrote is accounted for and validated in A Random Walk Down Wall Street.

 

[Pdxwayne]

Back in early 2018, I got a family member who got all excited about bitcoin and about a certain "club" that promised excellent returns....

In less than two years, the club he got so excited about closed down as 722 millions fraud....

https://www.justice.gov/usao-nj/pr/three-men-arrested-722-million-cryptocurrency-fraud-scheme

 

[Chromatischism]

Back in the early days, bitcoin was going to revolutionize electronic settlement networks. If Joe wanted to pay Al, it would be easier/cheaper/(fill in the blank) to do so via the Bitcoin network than via ACH or SWIFT or Visa or whatever. Nowadays, crypto is mostly viewed as an asset that will appreciate in value.

These two are completely antithetical to each other.

If Joe thinks his bitcoins (or monero or whatever) are going to appreciate in value, he would much prefer to hold onto them, rather than to use them to pay Al. Conversely, to be useful for settling accounts, you need a token that's stable in value, not one which fluctuates wildly. (Don't bother bringing up "stablecoin(s)". Every single one of those is either a scam or a flop (or both). In any case, they are irrelevant to this discussion of crypto as an "investment" vehicle.)

The bottom line is the crypto (the investment vehicle) is an asset that will appreciate in value because --- at any given moment --- there are people who are willing to buy it in the expectation that it will rise further in value. Unlike gold or pork bellies, it's not actually useful for anything (especially not for its original ostensible purpose: a token for electronic settlement).

It will keep going up as long as there's another sucker who thinks it will go yet higher. Which, I guess, is why there are folks here eagerly talking it up to the "boomers".

The same is true of gold and many other assets. Holding crypto tokens isn't much different than holding stocks in terms of investment mechanics. At the end of the day there's market cap, total value locked, supply, adoption, growth, etc.

For crypto, your comments about use as currency is true for Bitcoin. It found its best use as a store of value. It will be interesting to see how El Salvador gets on with it as currency. It's rather extraordinary that 10 years ago people were buying ramen and pizza with it like it was play money. Fast forward to today and we see its value and personally, I wouldn't spend an appreciating asset now that we know what it is.

However Bitcoin is far from the only crypto project. And, there are many more use cases than currency for crypto. Look up how Ethereum, Polkadot, or Solana work and you'll see. Digital art, smart contracts, decentralized lending and borrowing, and many other uses.

 

[samsa]

The same is true of gold and many other assets.

I wasn't the one who recommended investing in silver.

All of those are stupid long-term investments.

Holding crypto tokens isn't much different than holding stocks in terms of investment mechanics. At the end of the day there's market cap, total value locked, supply, adoption, growth, etc.

When you buy a stock, you're buying part ownership in a company. That has an intrinsic worth. If you buy a broad basket of stocks (e.g., through an index fund), you are buying part ownership in a growing economy.

Think about what the analog of Price/Earnings or Price/Book ratios is for crypto.

For crypto, your comments about use as currency is true for Bitcoin. It found its best use as a store of value. It will be interesting to see how El Salvador gets on with it as currency. It's rather extraordinary that 10 years ago people were buying ramen and pizza with it like it was play money. Fast forward to today and we see it's value and personally, I wouldn't spend an appreciating asset now that we know what it is.

However Bitcoin is far from the only crypto project. And, there are many more use cases than currency for crypto. Look up how Ethereum, Polkadot, or Solana work and you'll see. Digital art, smart contracts, decentralized lending and borrowing, and many other uses.

The statement stands unmodified for those other projects. To the extent that any given crypto is useful as an investment vehicle, it is useless for those other purposes (and vice versa). The blockchain may have other uses besides crypto currencies (most of those "uses" are bogus, but I'm willing to concede that some smart person will eventually find some genuinely useful role for it), but that's not relevant to the present discussion.

 

[Jim Matthews]

https://www.coingecko.com/en/public...Unu8bwgvx8o-1631066113-0-gqNtZGzNAfujcnBszQlR

Those are only a fraction, since it is only public companies on that list.

Two things to note on your list.

The public companies listed (with the exception of Tesla) appear to be specifically built to "trade" Bitcoin, and nothing else.

Secondly, Bitcoin holdings as a percentage cannot be computed.

As an aside, Tesla's bitcoin holdings have produced a net loss in the company's share value, and drawn SEC attention. Hardly the sort of performance a Mom & Pop retail investor will tolerate.

https://dcfinvesting.substack.com/p/tesla-fair-value

 

[Jim Matthews]

This guy is missing the forest for the trees.

He's a Goldman Sachs analyst, infamous for predicting the 2008 housing bubble and MDS collapse..

More for the rest of us, then. A lot of these folks are coming around as they learn more about it.

"A lot of these folks are coming around..."
Name a few, it would be refreshing to hear a verifiable list from you.

https://www.theguardian.com/busines...an-least-afford-it?CMP=Share_AndroidApp_Other

 

[raistlin65]

How is a picture like that going to increase the odds of that happening?

Also my identity theft insurance covers 100% of the cost and they do all of the work to fix identity theft issues. All I have to do is call them.

Spoken like someone who's never experienced significant identity theft.

It's not the money being stolen which is the issue, as that you are generally covered for anyway. It's the huge hassle it creates, and I bet your identity theft insurance doesn't take care of everything like you think.

Those insurance services say they work to fix it. But they don't guarantee to take care of it all. If you had gone through what I've been through, you would know that.

I still would prefer to not have to use it, but I'm not understanding the concern here. It's a picture of a number on a random internet site with very little identifiable information. The amount of work required to use that to steal my identity wouldn't be worth the effort for someone into stealing identities.

Sounds like you don't have enough assets to imagine how you could be a target.

 

[Jim Matthews]

https://news.bitcoin.com/standard-chartered-report-structurally-values-ethereum-at-26k-to-35k/

Any "news" sources that don't have Bitcoin in the masthead? This is a Science based forum - your assertions don't withstand even cursory examination.

Any companies (other than Tesla) publicly trading cryptocurrencies as part of their discoverable filings - that aren't expressly formed to do so?

Thus far, your support of cryptocurrency as an investment is very neatly undermining your position in its reliance on promotional materials and offhand dismissal of considered challenges.

It's a classic "Pump and Dump" scheme.

 

[Jim Matthews]

In less than two years, the club he got so excited about closed down as 722 millions fraud....

https://www.justice.gov/usao-nj/pr/three-men-arrested-722-million-cryptocurrency-fraud-scheme