DECISION TIME: Should You Invest in Crypto or the Stock Market?

12 September 2022

The crypto believers & scammers will HATE this video! After “investing” in crypto and the stock market AND getting a financial education, here’s what I’ve concluded about how investing in bitcoin, crypto & the stock market compare.

 

RECOMMENDED BOOKS & AUDIO ABOUT INVESTING 💰

#️⃣1 FOR INVESTING BEGINNERS

– “How to Own the World: A Plain English Guide to Thinking Globally and Investing Wisely” by Andrew Craig https://aaronhenriques.com/x9to 

– “Money Master the game” by Tony Robbins https://aaronhenriques.com/c9qn 

– “Misbehaving: The Making of Behavioral Economics” by Richard H. Thaler https://aaronhenriques.com/9hwx 

– “The Psychology of Money” by Morgan Housel https://aaronhenriques.com/xtvs 

– “Unshakeable” by Tony Robbins https://aaronhenriques.com/odz1 

– “The Warren Buffet Way” by Robert Hagstrom https://aaronhenriques.com/egbu 

– “The Bitcoin Standard” by Saifedean Ammous https://aaronhenriques.com/qe8y 

 

Also Recommended

– “Principles” by Ray Dalio https://aaronhenriques.com/41cp 

 

⏱CHAPTERS:

00:00 – Cryptocurrency vs Stock Market – Should You Invest?

02:42 – Is Investing in Bitcoin & Cryptocurrencies a Good Idea?

04:19 – How do people make money from stocks and shares?

04:49 – Are Index Funds the Best Way to Invest?

06:17 – How Much Should You Invest in Bitcoin and Cryptocurrencies as a Beginner?

08:09 – How to Learn About Investing – For beginners

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Opportunity Awaits podcast Episode Transcript

[00:00:00] Aaron Henriques: So how does Bitcoin and crypto compare to the stock markets to investing in the stock markets? Now, the first thing I'm going to say, I personally do not see Bitcoin or any cryptocurrency for that matter as an investment. Not at all, not currently as it stands. But if you must call it that let's compare it.

[00:00:25] So yes, the people that are shouting, but the stock markets go up and down all the time. In fact, they do every second of the day, they're up and down, like yo-yos up and down, up and down, but they are not 20, 30, 40% up and down, like. Not, not usually, I'll say usually because things like COVID happened and that had a significant impact.

[00:00:51] You had the 2008 financial crisis. Was it Lehman brothers that went down? Don't quote me if it's not Lehman brothers, sorry. Lehman brothers. I meant someone else, but anyway, they went down massive, tragedy happening around the world and stocks plummeted and everything like that. But anyway, yes, they do go up and down.

[00:01:09] But it does not have that volatility generally speaking over time. And remember the stocks are real businesses that are operating in the underlying asset now. Yes, there are gonna be some of you that now say. Bitcoin is like a real business or, theory or whatever, all these other ones that are out there, there's literally thousands out there.

[00:01:30] That they're real business. I'm not talking about that. I'm talking about, they are real businesses providing service products, whatever that they do, tangible things to people out there in the world. These cryptos are not doing that. If it's a realistic investment proposition for you to invest in crypto, then I would also suggest that so that you've got a more holistic view, broaden your mind, read some books on investing.

[00:01:58] Lots of the investing books actually don't really cover much about crypto one. I did read recently covered it a little bit, and he only added a little bit at the end. And his reason for that was that crypto is still so small, even though people think it's this ginormous thing that everyone has, it is still so small.

[00:02:15] As I said, it's smaller than apple, like the global crypto. Like net worth or whatever you wanna call it is less than the value of one company in USA called apple. So recent books consider, is it really worth your investment and the risk of your money at this stage with how volatile it is?

[00:02:37] It may be that you come back in a few years and reassess. If it gains that stability, the fact is it is like the lottery and you are really unlikely to win at this game. The difference between the lottery is, most people, they might buy, a handful of tickets. They might spend £20, $20, whatever, on, on a few tickets every now and then, or even if you are one of them, people to do it every week.

[00:03:01] The difference between that and what crypto. What people are doing with crypto is that, people are investing huge sums of money into crypto as an investment in this hope that they're gonna make this really big return. And it's unlikely. It's definitely not a sure way to get rich by any means. If anyone tells you, they can guarantee you your returns, they are lying.

[00:03:26] Nobody can guarantee you your returns. When Bitcoin got to like 60 something, I saw so many of these gurus on social media saying how Bitcoin will never. Ever go below $50,000 ever again. It's on its way to a $100,000. They were doing this pump and dump on Bitcoin, I think. And what happened within a few weeks, it went from like over $60,000 and crashed straight back down to like $19,000.

[00:03:59] That's insane. If you are someone who whacked in like a $100,000, when it was at its peak, when there was so much noise about. Your a hundred grand within a couple of weeks, went from a $100,000 all the way down to, probably about $30,000 or less. Can you afford to be losing money like that? Probably not.

[00:04:20] Now for most stocks you benefit twice. How'd you benefit twice. Once one, one benefit is the stock price going up and down. Generally speaking a stock market will increase over time. History tells us that that is what happens. It generally speaking increases over time and providing that you've kept your money in long enough, you will make an increase over time.

[00:04:45] There is nothing in history that says different to that. The second thing is that depending on the fund or the stock that you're investing in, and I massively back funds after the research I've done, I would, I am definitely more into funds and how I've tailored my portfolio than individual stocks.

[00:05:04] But in any case, most of them will also pay you a dividend. If you choose for a fund that is in accumulation fund, it's a bit different, but ultimately you get some money back from the company's profits at the end of the year. With crypto currently, how it's set up. There is no profits. There is no money.

[00:05:22] You get back on top of your investment. So what I'm saying, it's not an investment. It, the, the value may go up and that's great if it does. And it may go down. That's not so great if it does. A stock in a company, the value may go up or down, but if there are, if it's making profits, you will also get a dividend provided that it's a dividend paying company.

[00:05:47] And as I found out recently, some companies are not dividend paying companies, particularly tech companies, one that you may be very familiar with. I don't wanna get sued. I don't want to have to take the video down. So I'm not gonna say their. but I'm sure you've got their apps and been on the website anyway, but if it is a fund, you usually have the option to have the income paid out as income or reinvested in an accumulation fund, so that you make the most of the compounding effect.

[00:06:15] So that you grow that as quickly as you can. If you are going to invest in Bitcoin or crypto, how much should you. So this is another thing that you really need to think about. We've all heard the of "DON'T PUT ALL YOUR EGGS IN ONE BASKET", Aaron, you've probably even told that a million times.

[00:06:33] You've probably said it to other people, but then you would go and do something like take, because you've seen this cryptocurrency going up and up and up, it's gone up 200% in the last month. Therefore I'm gonna now whack in my life savings in there in hope. It's gonna go up another 200%, but I know I'll take it out afterwards.

[00:06:52] The reality is, as we've really discovered is you probably wouldn't take it out. First of all, even if it did go up a little bit but you could be falling prey to one of these pump and dump scams, which they are, where you're gonna lose a lot, if not all of your money. So don't put all your eggs in one basket.

[00:07:11] It's not sensible to have all of your investment portfolio in one thing. Anyway, you should diversify that because if that one thing goes down, remember I'm not your financial advisor, I'm just telling you what I think the, and the things that I do, if you, if that, if that one thing goes down or the company fails and that does happen or whatever it is, goes bust or some new regulation comes.

[00:07:39] Which means it's no longer as profitable as it was, whatever, whatever happens, new technology. I would say a sensible portfolio might have a maximum of 5% in. And if you are extremely if you're extremely risky as a character and you're, you're prepared to risk a significant sum of money, maybe up to 10% of your investment portfolio into crypto.

[00:08:09] But don't do any more than that. If you are someone who has like 90% or 100%, even more than 50% of your portfolio in crypto, I would strongly suggest that you review that probably you go and read some books on investing and that may well change your mind.

[00:08:25] In fact, I'm gonna put some links in this on some books that I highly recommend for investing. For you to learn about it, because it's important, about this stuff. My friend, I told you earlier, right, I've I've offered him these books a few times. And he's like, "I don't read". I'm like, great. What would you want me to say to that? You're putting your life savings into this thing, but you care about this money, but not enough to read about it obviously, but anyway, that's just how a lot of people are.


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