We all have hopes and dreams of financial independence and knowing that we can support our lifestyle and our retirement goals.
For many people this is not a reality and there is the temptation to take much more risk than we are comfortable with in the hopes that they can fast track their way to prosperity.
For many weighing their options investing in cryptocurrency might seem like the quickest way to achieve the financial security that they crave. Because of the risk associated with cryptocurrency people in certain specific financial situations or have certain specific character traits that it would be in their best interest to refrain from investing in crypto.
Don’t roll the dice on crypto if you fall into any of the following categories.
You carry high credit card debt. You may be thinking that with your crypto earnings you could pay off that credit card debt. That is the mindset of a gambler and you are much better off taking a more conventional approach to paying off your debt by holding to a budget and paying off higher interest credit cards first.
You are nearing retirement age. This is the time in your life that you should be taking less risk instead of assuming more. The money that you have saved in your lifetime is about to be your source of income so this is not the time to be adding risk assets to your portfolio.
You are not taking advantage of your employers 401k plan. If you are not taking advantage of your employers 401k plan you are literally throwing away money because you are missing out on your employers contribution.
More than half (54%) of employers report that employees participating in plans are not taking full advantage of the investment options, features and services offered in connection with their 401(k) plan, according to a survey by Charles Schwab.
You are looking to get rich quick. If you would have entered the crypto market in late 2021 those dreams have already been crushed. Crypto is extremely volatile and operates in bear / bull market cycles that takes approximately 4 years to go full circle. For every Bitcoin billionaire story there are hundreds of stories of people who lost it all.
You are risk adverse. If seeing your investment plunge 75% keeps you up at night then cryptocurrency is probably not an investment vehicle for you. There are user risks , regulatory risk and counterparty risk along with market manipulation. If reading this starts to make you anxious then consider more conventional investments.
Thanks for reading !
