Cryptocurrency Decrypted Part II
On this episode of Financially Naked: Stories from The Financial Gym, two of our Certified Financial Trainers, Hector and Garrett are talking all about Cryptocurrency!
In June of 2021, Hector and Garrett did an episode all about Bitcoin, and since then, it has only become more mainstream and part of the personal finance conversation. Listen to Cryptocurrency Decrypted Part 1 here!
Podcast Notes
Cryptocurrency is not new and is not going away any time soon. Even though it’s been around and is gaining more popularity, there is still apprehension around it.
There are two ways to look at it; either as a currency, or as an investment. If you are using it to make purchases, that’s a currency. If you are planning on buying it and holding, that’s an investment.
Cryptocurrency is much more volatile than traditional investments. It trades 24/7 and is going up and down constantly. One person’s tweet can massively swing where this can go. If people are making money on it, it will be in the news.
When you are looking to invest, know what you are investing in. Don’t get caught up in FOMO and always do your research, or talk to a professional!
Think about crypto like a long term investment. Put the money away, and be comfortable knowing it will go up and down. Only invest money you are comfortable losing.
More big players in the game are beginning to accept cryptocurrency, Starbucks, Tesla, AirBnB, Stripe, and other payment processing platforms.
Coinbase is a great place to get started. It covers all of the major players for buying and selling.
Before getting started in crypto, make sure your personal finance foundation is solid:
Ensure any high interest debt is paid off
Have an emergency fund in place
Make sure retirement contributions are taken care of.
Sit down with a pen and paper and determine what amount is right for you. How much can you afford to invest and are you comfortable with that level of risk?
The 5% rule is a good rule of thumb. Keep your crypto investments to 5% or less of your investment portfolio, to ensure diversity among investments.
Gary Gensler is a major voice in the crypto space. His YouTube video is a great place to get started if you want to learn more: Watch Gary Gensler’s Introduction to Crypto
Listen to Cryptocurrency Decrypted Part 1