The most interesting point about this post, at least for myself while writing it, was that it would have looked a whole lot different one year ago, let alone two years ago.
Background and Motivation: Birth of our daughter
Until January 2020 my wife and I were DINKs (Double Income no Kids) both working full-time and living in a rented apartment. At the end of each month, we would often have a decent sum of money left over to save or “mess around with” aka. investing in whatever we (or mostly I, as with us I am responsible for paperwork, money, taxes and what comes with it) deemed worthwhile.
Then in January 2020 our daughter was born and suddenly things turned 180° degrees. My wife stayed at home for a year and as we are both working in Switzerland where there is basically no government-funded parental leave where the employer must guarantee a return after the year, she was at high risk of losing her job, especially since she did not intend to go back full-time.
From one day to the other we were left with one income only and it made us realize how fragile our situation was. Should I for whatever reason, lose my job or worse be unable to work at all, we would be in serious trouble.
As many couples have experienced, when you have kids you also start thinking about buying a house (for personal use) differently. Up until 2020 I was thinking about it merely as a financial investment. And not a good one in terms of ROI, especially since once it has been paid you can live without paying rent, but not for free. There still are the recurring costs like heating, electricity etc. and the worst of all, maintenance. It can also be considered putting all your eggs in one basket, making yourself inflexible and involves a lot of interest going to your bank.
I still consider all of this to be true. However, in summer 2020 we bought a house a couple of streets from where my parents live. It was more a lifestyle decision than anything derived from economic reasoning. We both moved out of our hometown for our jobs to earn good money and are now living in an apartment with annoying neighbors, not enough space (especially since we drifted into the whole teleworking situation during the pandemic) and no garden.
Paying off the mortgage is of course our top priority now and will be for the next three-four decades. The house is still being constructed at the moment, expected to be finished in Q1 2022. Somehow before that, we also need to accumulate a couple thousand bucks cash to purchase a kitchen which is not included in the loan we asked the bank for as this would have ruined the great interest rate that we got.
Safety Net and Insurance
Considering the last two chapters it becomes clear that we need to get insurance for worst case scenarios lest our daughter has to grow up living from social security in case anything goes severely wrong (2020 has shown how quick one can lose their jobs or become unable to work without one’s own fault).
I already had disability insurance but should I or my wife (god forbid it) die before the house was paid off, the other one would be screwed having to look after the child and not being able to work with the same level of income.
Therefore, we both applied for a term life insurance which allows us to sleep a bit more at ease again.
Of course, you also have to prepare for the third chapter in live. One thing to be said is that I do not trust in government funded pensions and as a matter of fact our German government doesn’t either, recommending the people to get private pension funds as well. However, I neither trust those. Most government-supported private pension models have all their interests sucked out of them by the fees charged by the offering banks. As all they do anyways, is to invest your money into the stock market and then keep most of the gains, I might just as well do that myself.
For the last fifish years or so I have started to build my own portfolio based on Dividend Aristocrats and dividend-focused ETF. The returns I get in dividends are about 3% pa and have been so constantly. The portfolio itself is also performing nicely, at least except for the minor COVID-crash it has never been in the reds (and never so far that the dividends did not make up for it). Long before it became a term in crypto I decided to build a HODL portfolio here that I will build and keep literally forever, having the dividends on top of my pension once I retire.
Building this will have to pause for now, as money flows into the house but the portfolio is still sitting there and spitting out dividends which I will continue to reinvest.
Crypto is about the only financial aspect of my life where I really screwed up. I didn’t follow the rules I set for myself in the more stable stock market and traded and swapped coins chasing highs and paying fees while alternately FOMOing and FUDding. The few projects which I held on to went bust.
Just the other day I did the math. If I still held all the coins I originally purchased for fiat money I should have 0.19965524 BTC and 5.01072102 ETH in my wallet. As things stand I am down to 0.120973 BTC and 0.355072 ETH. I have no idea where those 4.7 ETH went but it sure does hurt looking at these numbers especially nor that 1 ETH is worth more than 1k USD again…
I have been lucky to make up some of my losses by trading ETN certificates on ETH and BTC with my house bank's trading account but the whole thing still didn’t even itself out.
A year or two after I burnt all that crypto in the downfall of the last bull run I discovered Splinterlands and got hooked by it purchasing boosters and cards for a total of 3.4k USD. The cards I got out of that also lost value but I was able to earn that back from playing so that as of today I hold regular foil cards worth ~3k USD and gold foil cards worth about ~960 USD (according to Peakmonsters market prices). Although this has to be taken with a grain of sold as selling is difficult due to low liquidity on the markets (especially for expensive cards) it offers a ray of light in my crypto journey especially since I can continue earning from the cards by playing or renting them.
Given the circumstances I will not have the luxury of being able to invest in crypto this year and frankly I believe that at the moment with the parabolic rise of the markets it is also too risky for everybody else. Maybe I will pick up some certificates again for a couple hundred dollars when the markets have crashed and cooled down in summer 2021.
However, I intend to stay highly involved in the crypto world investing my time rather than my money and earning back some of the losses with Splinterlands and Hive Blogging. I may shift my strategy there. Up until now I have pretty much re-invested everything I earned in new Splinterlands cards but as I have already broken even (at least with the current market values) I may start cashing out some DEC and buying alts that crashed at their lows (100k DEC swapped to Hive and then to XRP at Binance right now could be a dead loss but might also go a long way some time in the future).
For the avid reader my strategy and goals must sound quite boring and I admit that they have changed from a young crypto enthusiast with easily accessible funds to a middle-aged man’s life plan.
But looking over my shoulder I see my wife playing with my daughter, both beaming at me and laughing, and I know that this path is the right one to follow.
Disclaimer: No financial advice included in this article. Just my personal experience and plans. Do your own research!
Some links in the post are referral links. Feel free to use other sign-up methods, but you really should sign up to Splinterlands with a referrer as that earns (both you and them) a free trading card once you decide to purchase the spellbook.
Images courtesy of Unsplash.com
This is a re-published post from my account on the HIVE blockchain.