I'll admit it, I'm bad with money. Try as I might, if I have money, I'll spend it. Initially I used Bitcoin for investing. I didn't have a lot of money and I saw the potential in the long run to have something to help my current situation. I know though, that unless I have a lot of money to put in, my returns will be quite small.
Before I continue, I want you to understand a few things:
- First, I am only speaking of $60, though I hope to add to that in the future. I do have other investments in Cryptocurrency (CC), but they are separate from this article.
- Second, I am disabled and unable to work, and I give plasma twice a week to get a few bucks. Sometimes I make sales from my books.
- Third, while trying to get my life in order and to be self-sufficient one day (hopefully), right now I am saving up for dental work. I don't have dental insurance, so I have to pay out of pocket and need two teeth extracted, as they are in a lot of pain.
I mention this not to have any sort of sympathy or try to influence the contest to my favor, as it may seem like I am trying to do. No. I bring this up so you understand the full context of how and why I use CC (Bitcoin) and why it's so important to me. Moreover, I think even if I wasn't under such dire straights, this would be good to do, but certainly my motivations would be quite different. Money for me is hard to come by and I need to make sure I can put it somewhere that I won't be able to splurg my money.
The Tooth of the Matter
For the last seven years, my one purpose was to get a handle on my disability so I could live my life. Every waking moment has been towards that goal, to have financial independence. Lacking a job meant I lacked a lot of other things. I had the mentality that if I could resolve my finances, then I could properly deal with everything else. Seems logical. I have self-published books, I do ghost writing, and have uploaded a course to Udemy. I am still doing what I can, even though I am severely limited.
Then my teeth became a problem. I mostly ignored them, did what I could with brushing and used creams to dull the pain. Over time, and very recently, my teeth became a serious problem. The creams only help a little bit, but now I'm limited in what I can eat. So now I have a very immediate problem, but I lack money to deal with it, and what little money I have, I tend to spend it. So, I turned to CC.
When it comes to CC, most invest for one of two reasons. One, they fear the crash of the global economy and want to be prepared by using a system that no government can touch. Two, they hope that one day CC will have a high payout. I certainly have a fear of the first one, and I hope that the second one will be true for me, but my investment of $60 has nothing to do with either of those. Simply put, I need a place to put my money and not be tempted to spend it.
Before Bitcoin became viable, there was generally only two ways to save money for a rainy day: savings accounts and piggy banks. The idea of a savings account sounds great, and I still use them, but not for its intended purpose. It's supposed be used to put your money in there and let it grow. You're even incentivized by acruing interest. So the longer you leave your money in the account, the more money you obtain. Of course, on average that is 1%, and when you have little money, a little percentage of that equals pretty much nothing.
However, my Savings Account is linked to my Checking. Now this is great that I have a little something in case I overdraft my account. However, it is easy for me to access and to spend. With it being easily accessed and easy to spend, defeats the purpose of a savings account. It might as well be a backup Checking Account.
The alternative to a savings account is a piggy bank. Generally they are ceramic or procelain that is decorative and the only way to get your money out is with a hammer. Of course, once you smash it, you can't use it again, and if it is something you value (because it's pretty), then it makes a great place to put your money. A less extravagant option would be a money jar, like the movie Up. As great as this is, you don't acrue interest with it, and there is still the temptation to use it. And with a money jar, I take out the quarters so I can buy things when I go out. With phyiscal money, it's just too easy to spend it.
The temptation of money is great, whether in a piggy bank or a saving account. Either option, I have easy access to it and will spend it. I'm bad with money. Not with Bitcoin. With Bitcoin, which let's face it is still the top dog, it takes me days to buy it. And if I need the money again, it takes me days to put it into my bank account. Yes, there is a danger of the market crashing, though it's more likely to gain. Then again a drop in value is still more than it would be if I spent it all. I'm a glass half-full with a silver lining kind of guy.
I remember seeing a commercial where a woman sees something on TV that she must have. So she goes to her freezer and pulls out a block of ice that has her credit card in it. She intends to melt it so she can get that crazy thing. Just as she closes the freezer, she sees a house she put on the freezer door, to remind herself that her dream is to one day own a home, which requires great credit. She decides to put the block of ice in the freezer.
Bitcoin for me is like that block of ice. While I do have a credit card and I am building my credit this digital block of ice prevents me from splurging, which allows me to save up for the things I need, such as going to the dentist. Of course, there are ways to spend Bitcoin directly, as many places accept it, but I've purposely made myself ignorant on how to do that. Also, the value will flucuate, which can be to my benefit and to my detriment. Unless it goes directly to $0, it will always have a value, and as I mentioned, if it goes down, it's still more than had I had it within my reach and spend it. If it does go up in value, then it brings me to the dentist that much faster.
I use Bitcoin for it's stability. Some might argue that it's not that stable, but honestly, it is far more stable than the modern banking system and fiat currency. Knowing that I can't directly touch my money and the market continues on makes me feel confident that I can get everything I need. While CC has had its ups and downs, that ultimately means little to me so long as others continue to use the market.
My portfolio is one part investment and one part Saving Account. It might seem odd for doing that, but there is a beauty to Cryptocurrency well beyond what people generally use it for. It can be a place to save up for your dreams and goals, or for a rainy day for when something happens. I say that it increasing in value is not the reason I put money in there when trying to go to the dentist, but it is a reason for me not to pull the money out. Taking my money out for an impulse buy means that when I put money in there to replace what I lost, I will more than likely get less CC than I previous had, unless I pay more.
This isn't so much a tip for other people to do, but more of what I use CC for. I still use it for investment and I would love to throw a lot of money in for the long term and live off that for my financial independence, but until then, it serves as a way to stop myself from my bad habits. I don't know if this is what this contest wanted, but when I'm asked to show my portfolio and why I invest the way I do, this is the answer I come up with.
In the end, it comes down to this, Work Smarter, Not Harder.