I am now a proud HODLR. An investor, a saver, and a forward thinker.
But I wasn't always! How did I get here and where did it all start?
I hope sharing with you will provide some perspective on your own financial journey.
When I was a wee sprout in summer camp a friend taught me how to play a very interesting card game, Magic the Gathering! If I think back on how many cards we lost to spilled orange juice and fading in the summer sun my head spins. I had no concept of investing back then, I simply enjoyed playing. Twenty five years later and these cards' prices are soaring through the roof like a promising altcoin project! The game continues to grow and be popular for kids but many adults like myself are throwing hard earned grown up salaries at an old source of nostalgia.
Comic books, classic video games, Pokemon cards as well as other collectibles have all been booming during Covid quarantine, so what exactly is happening here? The secondary market for collectibles is unregulated so I can only speculate, however it seems clear that stimulus checks and crypto earnings both contribute to rising price tags for collectibles. I sincerely think it is wonderful to spend your money this way if you get value out of your enjoyment, but as an investment vehicle it reminds me of the old fable "do not build your castle on the sand." There were a few major factors I observed in the collectibles industry which led me to this conclusion.
Many times sellers' reason for parting with their goods would be a major life event like relocating, starting a family or medical expenses and hardship. Obviously these things take priority above all investments however collectibles seemed to be liquidated more readily than traditional assets. Additionally I observed a move towards digital, both within Magic itself (Arena is the online equivalent) and in the growing Esports industry. Lastly I noticed other "successful digital currencies" with far less use case and application than crypto.
For example, a video game trading website which used "forum gold" to exchange video game items and currency between different players. If purely imaginary items or currency in video games were being valued and routinely purchased with fiat, how does crypto compare? Just punch in a web search for "Echoing Fury Mace USD" to read about a video game weapon selling for thousands of dollars! If people were willing to shell out that much for mere pixels, what could a digital alternative to the banking system achieve?
That's where cryptocurrency comes in. For me I saw greater potential and future use cases in crypto then in video game currencies or even physical collectibles. Of course there are risks in crypto so I don't consider it my bedrock, but it is far more promising than building upon the sand of these fickle assets.
Wether you are a whale or a newcomer, enjoy investing in collectibles or crypto, I strongly encourage you to view your bedrock as your 401k, HSA, or some form or retirement account. If you have enough financial wiggle room to play in the sand by all means pursue your hobbies and spend as you choose, but remember to keep it in perspective and don't bet the farm on something you may regret (or spill orange juice on)
Where you build your castle is up to you, best of luck!