The Psychology Behind Why You Should Not Invest In Bitcoin & Crypto Currency

29 August 2022

Watch the full video on YouTube: https://aaronhenriques.com/OA034YT

If you’ve invested in bitcoin or other cryptocurrencies, or if you’ve been considering doing so, watch this episode right away to avoid making costly investment mistakes.

 

RECOMMENDED BOOKS & AUDIO ABOUT INVESTING 💰

 

📚INVESTING BOOKS

#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 

 

🔊INVESTING AUDIO BOOKS

#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/ui5v 

 

– “Money Master the game” by Tony Robbins https://aaronhenriques.com/b1s6 

– “Misbehaving: The Making of Behavioral Economics” by Richard H. Thaler https://aaronhenriques.com/y9sb  

– “The Psychology of Money” by Morgan Housel https://aaronhenriques.com/pdn0 

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

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

– “The Bitcoin Standard” by Saifedean Ammous https://aaronhenriques.com/3u7w 

 

Also recommended

– “Principles” by Ray Dalio https://aaronhenriques.com/crk4 

 

⏱CHAPTERS:

00:20 – How Our Minds Trick Us Into Buying Bad Investments

01:48 – The Truth About Social Proof: How It Influences Our Decision Making

04:33 – Why You Need a Basic Financial Education Before Investing

05:05 – 7 Habits That Mean You’re Likely Making Bad Investments

09:11 – Why Crypto Cannot Replace The USD or Any Fiat Currency

10:27 – Has Anyone Really Made Money From Cryptocurrencies?

12:05 – Affirmations: Can They Make You a Bitcoin Millionaire?

13:15 – Is It Really Worth Investing In Crypto & Bitcoin?

16:40 – Decentralization of Cryptocurrency: Is it Really Safer from Government Authorities?

18:53 – Decentralized Crypto Currency: What Is It and Why Would You Want It?

19:27 – Bitcoin & Crypto Worth Globally: How Much Is It Worth Today?

20:49 – Crypto Scams: What You Should Know Before Investing

21:48 – Is Crypto & Bitcoin a Good Investment?

23:01 – Invest In Cryptocurrencies: What You Need To Know About Crypto Investing Management Fees

25:13 – Is a Pump and Dump Cryptocurrency Scam a Real Threat?

27:03 – Are Crypto and Bitcoin More Safe Than Bank Accounts?

30:40 – Should You Invest In Crypto Or Stocks & Shares?

32:27 – The Secret to Profiting Twice With Stocks & Index Funds vs Bitcoin & Crypto

33:00 – Do Index Tracker Funds Beat Individual Stocks or Crypto?

34:26 – Make Money Fast and Safe: How Much Should You Invest in Crypto and Bitcoin?

37:37 – FOMO: Why You Shouldn’t Invest In Cryptocurrencies Right Now

38:15 – Cryptocurrencies: Will Governments Regulate These Virtual Currencies?

40:31 – Is Cryptocurrency Just a Gambler’s Dream or is It the Future of Money?

42:51 – Learn How to Invest in Crypto and the Stock Market with These Easy Tips

44:05 – Is Investing in Cryptocurrency Just Gambling with My Money?

44:53 – Will Bitcoin Crypto Ever Fall In Price Again? Here’s What You Need To Know

45:43 – Can You Really Make Money Quickly Investing In Crypto & Bitcoin?

47:09 – Why It Takes Time and Patience to Build Wealth

49:10 – Understanding Behavioral Economics Psychology: How to Overcome Bad Investment Decisions

more Opportunity Awaits with Aaron Henriques podcast episodes

Opportunity Awaits podcast Episode Transcript

[00:00:00] Aaron Henriques: So let's dispel some of these myths about investing in crypto currencies. Now there's a lot of people out there being attracted to crypto right now, particularly due to the social media influencers are out there. And people who think that they can make it really big really quick. But the first thing to look at. [00:00:19] Is how our minds really work the psychology behind how we make decisions or don't make them, which is really the truth for most of us. The truth is our species, us human beings. We are rubbish at just making decisions. Think about this. If we go to a restaurant in a brand new town somewhere we've never visited. [00:00:41] There's two restaurants on the high street there, and they both look quite similar in many respects. They're similar pricing, very similar menus. Let's say identical one is busy. One is empty. Which one are you more likely to go in? Now be honest there with yourself with your answer, which one are you more likely to go in? [00:01:01] And this just comes down to how we process and how we form our decision making. So the truth is if you are like most. Guys girls non-binary and people who like to identify as trees, if you are like any other above you are most likely to go into the busy one, but why is that what's going on here? Because if you think about it logically, if they're identical in every other way, it's most likely that. [00:01:27] In the less busy one, you're gonna get a faster service and get a more personal service. You're gonna have a chef, who's gonna be dedicating their time just on cooking your food. So your quality may be better. And you may enjoy the experience overall more than if you went to the busy one where you're gonna be waiting for ages, you think of it like that. [00:01:46] It kind of makes sense. Right. But the, the way we see it, that busy restaurant with no other information, you just see that there's more people. it must be better because other people prefer it. It's called social proof. That's why we look at review sites. You must, you automatically think in your brain, the service must be better. [00:02:06] The food must be better. And that's your, that's the better overall option, right? we decide this because we are herd animals. We cannot objectively make decisions on our own. We require social proof. What are other people doing? That must be the right decision. Whereas the other bar, the other restaurant might be playing better music as well. [00:02:29] They might serve better food. They might have more friendly staff, more comfortable seats, but you won't know because you never went there. And like I said, it's why we search. Things like Google maps for reviews on how many stars places have I do it all the time. I do it all the time. Even for something as simple as a car wash. [00:02:48] It's how we choose what book to read. If we're going on Amazon or audible, same company, there are others out there. It's how we decide what movie to watch on Netflix or prime or apple TV or whatever. It's how we decide what a state agent to use, what printer to buy the list just goes. It's that social proof. [00:03:07] The only time this doesn't happen to us is when we are so stuck on a familiar brand that we are used to Heinz ketchup, Heinz bake beans. I'll come off food, apple, my apple phone, my apple laptop, my apple TV back there. What else? Apple iPad over. I've got an apple pen, lots of things at apple. I don't need to go to review sites for that because I'm just gonna go with apple anyway. [00:03:34] But how many times have you been out there when you've just seen these Phantom queues at nightclubs where it attracts you to join the queue? Cause they're holding a big, long queue outside. It attracts you to long to join the queue. And when you get in, it's completely empty. There's no one in there and you're like, well, why is this massive queue? [00:03:50] It's because the nightclubs know that that's social. Of there's a big cue must be busy. Therefore it must be good. It's going to attract you. You may or may not be aware of that, but that is what's going on. So you may be wondering what has this got to do with crypto Bitcoin, Ethereum or whatever? [00:04:11] What has it gotta do with those? It's exactly the same for our investing decisions, how we come to those investing decisions, because we've seen it on social media. It's got that social proof and that's what will direct us from having no other information because let's face it. Most of us haven't even bothered to read a book. [00:04:30] I've read many books on investing, but only more. I started investing in things like crypto and the stock market and all sorts of stuff without doing any research. It's the same for our investing decisions and reason why so many people are in investing in crypto currencies right now, because they're following herd because of that social proof. [00:04:49] And it's leading to some seriously big investing mistakes. So I'm gonna talk about some typical human behavior and this might seem, this might resonate with you, but. go away and think, oh my God, I'm a bad human being. Let me not listen anymore. Pretend it's not happening. Pay a bit of time just to let this sink in. [00:05:09] If this is you, you definitely need to be listening to this. And by the way, not all of this will necessarily be you. But if, if you're seeing a pattern, then again, you need to be listening to this. The things I'm gonna talk about now could save you a lot of time and hard take in the future from losing a lot of money. [00:05:29] And before I carry on, I just wanna say, I am not a financial advisor. I am in no way, qualified to financially advise you or anyone in how to invest. I'm simply telling you the truths of what I've learned as how I know them to be today. And those truths may change in the future, but for now, this is what I've come to after. [00:05:50] my little trial narrative I've done. Like many of you may have done losing a lot of money. Seeing other people lose a lot of money and now educating myself on investing, not just crypto, but in other areas. So typical human behavior. So the first one I've put down is you wanna get rich yesterday. You see lots of stuff on social media, about Bitcoin or another crypto. [00:06:13] You've never heard of explaining it's going up. all these people are gonna make a ton of money. Now I'm gonna talk about why this happens later, because it's often part of a network scam, which I'm gonna talk to you about is very clever. You decide that because you were born using computers that it's digital and therefore it qualifies you as an actual expert, because you use a computer every day. [00:06:38] So you must understand and be right. That's another mistake. Another one is you invest when crypto is at its highest price, and guess what you sell when it's its lowest. So another one is you've invested in crypto when actually it's ended up being at its highest price, because you've just heard about it all over the place. [00:06:58] It's at its highest price it ever gets to you see it dropped by 10%, then 20% and you say to yourself, it will rise again. It will rise again. Write notes on the wall. Little sticky notes, put 'em on the mirror. It will rise. and then a few days later you see it coming back up a bit and you're telling everyone, look, see I'm right. [00:07:15] It is coming back up. Then it drops again to what your overall limit point is. And you lock in your losses, you sell and you lock in your losses, but get this right. This happens because the world can be really, really cruel a week later at regard by 50%. And you'll be sat there thinking if only I stayed in another. [00:07:39] does any of that sound like you or people that you know of where that's happened to? Because it's happened to me and I know a ton of people that's happened to as well, but this is how humans work. This is how we work. We start seeing things are really popular. We start seeing things are really popular. [00:07:58] It's in its highest demand. It's at its highest price levels ever. and then it will suddenly drop off a cliff and we get all depressed and we sell and lock in our losses. It's just how we do it. And the reason is because we're not trained, that's it. We're not trained in spotting. What's actually going on. [00:08:18] And to be honest with you, there are so many books out there that we could train ourselves, but we don't bother is the truth, had this been the stock market. I probably would've held my position in that scenario. Because you've got an underlying real world company. And when you factor in like dollar cost averaging over time, it, it evens out. [00:08:38] And as long as you don't believe the company's gonna go best, generally speaking, you should be and if you don't know what dollar cost averaging is either Google it or comment below in the notes. And I will do a video on that in the future, because I didn't know what it was until probably about six months. [00:08:54] and by the way, if you are just listening to this podcast, there are some visuals today. So I would recommend you go and subscribe on YouTube, go and find me on YouTube. The link is in the show notes, subscribe there and watch the video there because you'll get some visuals on this one which I really wanna show you now, right now, people seem to be really diluted in thinking that crypto is going to replace normal currency. [00:09:20] For things like buying stuff in the shops. Now, granted, there are some places that will accept crypto as payment. The problem is the problem is, and the reason why crypto as it stands at the moment being as volatile as it is will, will not. I can never say never, but it will not. Anytime in the foreseeable future. [00:09:43] Be a replacement currency because it's so volatile. You can't have a, you can't have the case where you are paying in one unit for, so let's say you had a pin of beer costing one unit of crypto. So that one unit of crypto is worth $5. Let's just say $5 for that one point of beer today. You can't have it that in three months time, when you come back to your favorite. [00:10:11] And it's still one unit, but the difference is that crypto of one unit is no longer $5. It's now $250. Are you gonna buy that point of beer? Of course not. Unless you are actually stupid. So what about this? Get rich quick hype with cryptocurrencies because granted, if I had just put a fiber in, all them years ago, when I first heard about Bitcoin, I would be a Bitcoin million. [00:10:40] Many times over if I had held my position, which most people wouldn't have done, because they would've seen their $5 or £5, no $5, whatever it was, turn into $300 and they would've sold because they would never afford that. It would go into the millions. Why would you there's no other thing in the past to show you that it ever would do that. [00:11:04] So there were very few people who. so there are a few serious, serious millionaires in hundreds of millions. Who've made a serious ton of money from crypto. I get it. But why the get rich, quick hype with crypto today? Now I know lots of people who've dealt with crypto. But if you are like me, You probably don't know anyone who's made a serious amount of money with crypto. [00:11:30] Am I right? I know people who have in invested a lot of money into crypto and lost a lot of money or maybe some who've made a little bit of money, but don't get me wrong. I know there are people out there who've got seriously rich from cryptocurrencies. There is no doubting that. I'm not sitting here saying that it's a, that they're lying at all. [00:11:53] But what I am saying to you is the chances of you getting rich from crypto is very, very slim. And you think about the most recent crash. So many people have lost so much money. It's unreal. Then you get the people who's gonna say like, oh, it's going to rise again. So I'm gonna put a sticky note on mirrors and pray to it every day and just hope that the universe. [00:12:17] Please. Don't be one in people. I know two people, particularly who've lost large sums of money through crypto. Now, when I say lost, some of it is through losing part of it is part of their profits that they had gained, where they hadn't cashed out. They've lost that. But part of it is literally their cash they've earned from job. [00:12:41] Put. They've lost money. Now, one of whom is completely fixated and convinced that his portfolio is going to not only regain his losses, but also make him a multimillionaire. Right now that person is down by over £100,000. That's about $120,000. Yes, I did not say that wrong. [00:13:15] There's another person I know who made quite a big gain at the start now he was up. I think he invested about $15,000. And it doubled to over 30,000, $30,000, but then it started dropping over time. And again, typical human behavior. He never cashed out. He never like took out his original investment of 15,000 and just kept like the 15,000 profit in there to play with. [00:13:43] He never cashed out the profit. He kept his original investment in there and he too was convinced. He kept repeating these phrases to me. With absolute certainty, like as if God himself told him now he would say things like, oh, this is just how it is, but it's going to be worth five times more than what it is today. [00:14:09] In a few months when X, Y, Z happens, this court case was going on or something else was going on and he was Absolut. Certain now again, he's never done it. He's got no financial background, no financial education, no investing experience whatsoever. Put his entire life savings into this one cryptocurrency, which is so dangerous, but that's what he said now, fast forward to now, and the most recent crash where it dropped by the 50% again. [00:14:40] So he's gone from that over $30,000 to now around $10,000. now, although his actual cash invested loss is only $5,000. That is still real money, still real money that he has lost that could have helped him to buy his next house or whatever it is he wanted to do. But he is lost all the profit. I spoke to him quite recently about this. [00:15:03] And I just asked for what his thoughts were today. Now I was still surprised that, and I'll read from this, I'll show it on the screen that he was saying, like, I think when crypto recovers, I should be able to earn 60,000, 110,000 profit from my investment. If I time it right now, how on earth is he gonna time it? [00:15:26] Right. That's my query. Cause he doesn't, there, there is no timing, he doesn't have experience in that. He's not a day trader even, he's just, how do you time that? Right? Then I sort of, alluded to the fact that. You can read this if you're on a video that is so risky. [00:15:46] And then he went on say like he agrees, but he did it two years ago. And the risk is major and I'm out of it when I can. So they're obviously a bit contradictory because, in one hand he's sort of still in that belief, in his head that he's gonna make it into this big sum of money. Maybe not as big as he thought. [00:16:07] Before, but he's gonna make it into some big sum of money. But now saying, at the same time saying it's really risky and he's getting out of it when he can. Now I would suggest that the latter bit is the correct thing. And if I were him, I would probably get out of it as soon as it gets anywhere close to his original investment of the 15,000, if not immediately, and just accept the five grand loss, I don't know where that's going. [00:16:31] And the thing is neither. Is he or anyone else who he's spoken. Now another massive M which always gets me is it's safe from the hands of the government, this decentralized, it's outta the government, hands out of their reach out of their view is complete and utter nonsense. It's the biggest load of cos wallop I've ever heard. [00:16:55] So why is it irrelevant? Yes, this might be decentralized and the way that. the locals work means it's all over the, the world. And in fact, it can be traced back to you, by the way, for people who think for people who believe that me, if the crypto cannot be traced back to you and it can be used for money laundering, stuff like that. [00:17:13] Yes. It's probably being used for money laundering, but it can definitely be traced back to you. The reason why this is stupid to say is because in general, in society, modern society today in general, People tend to follow the rules, whether they like them or not, they tend to follow them. Now, crypto is not big enough yet where even though your, your social media might be telling you that everyone knows about crypto and everyone has it, and everyone wants it and everyone wants rid of the government and all this stuff. [00:17:48] That's just because your log of is feeding you more of what you like to hear. The, the fact is crypto is still tiny and I'll get onto. But people generally tend to follow the rules. So do you think that if the government said, do you know what crypto is banned in the United Kingdom then banned in the United States, banned all across Europe. [00:18:12] Do you think for a moment that you could go to a card dealership and pay for a car with crypto or go to a bar and pay for your drinks? We or a restaurant for, pay for your meals with crypto. If the government have out have bandit or outlawed it or whatever, do you think that's really going to occur? [00:18:36] Just ask yourself that it's not, is it that you're not gonna get the companies going against the government rules, rules come in all the time that companies don't like and have to abide by them. If they don't, they're not getting fined or shut down and even worse, the directors go to jail and more to the. [00:18:54] Why would you want it decentralized? Like for one, you probably don't even understand what it means. And number two, what value? Even if it, if, even if you do understand decentralization. What value does it bring to your life to have it like that? There is no value. It is so volatile. It is nuts. You wouldn't want to, like, I come back to you don't wanna pay $5 for a beer one day. [00:19:18] And then a few months later that beer is now $250. And then a few months later than that, it's now $2,000. Like that's insane. It just is not practical. Now another big myth is that crypto is huge. I sort of just come onto it just now about it's so big and everyone's got it and everyone's doing it. And the fact is it's a bollocks. [00:19:42] Crypto is not huge. It's big. It's not huge. There are individual companies. that are worth more than the entire global crypto market. The entire let that sink in the entire global crypto market is worth less than just apple, apple, apple computers, mobile phones, whatever, less than that. [00:20:07] That's one single company in the USA. So if you think that somehow crypto is huge and it's going to overtake everything, just remember that you've got companies like Google and apple. Facebook. All of these ones they've not been able to crypto is starting to, nor at governments now, granted. And this is why regulation is coming in. [00:20:30] They are getting regulated. Funny enough, just like social media did when it became a problem, it started getting regulated. So crypto is not huge enough to become a a global problem. It's definitely not the next reserve currency that I can tell you. It's, it's just not that big guys. [00:20:50] So now onto the crypto scams, you hear things like, oh, this guy I know guaranteed me a 10 X return on my money. Nobody can guarantee you a 10 X return on your money. Nobody. There are literally tons and tons of scams out there that prey on people who are desperate to get rich, quick, desperate. [00:21:16] Even if you don't admit it. If you are falling for these scams, that is the only reason. And the thing is they use social proof, social proof because they've put up, I don't know what looks like. So I've just, I've just shown text messages from between me and one of my friends on here. [00:21:35] If you watched on YouTube and I could have put anything in there and they could be false, they could be real. You don't. But trust me, they're real. But then do they might not be, this is the problem. So they'll put up these social proof and they'll put up things where these testimonials of people saying, oh my God, I only put in like $2,000 and I got back $25,000, six weeks later. [00:22:02] Amazing guys. I can't wait to invest more. That sort of thing. Attracts people, attracts people thinking, oh, I can get, I can make some really quick money. And they'll go and dump their money and they'll never hear from them again. I literally had someone message me recently. On my, on my IG, they, they, they messaged me, guaranteeing me 100 X returns, but he couldn't do it himself. [00:22:29] It needed to go through me because he's only a 16 year old boyfriend Romania. And so he can't do it him. Okay that, but he was so certain, I don't even know if he was real. He might not have been a 16 year old boyfriend, Romania. He might have been a complete scammer or he might have genuinely been a 16 year old B from Romania who has convinced himself deluded himself, that he knows the way to make a hundred X return. [00:22:52] And only he knows. And this real big secret that he's got, that he knows. And maybe it was true, but it's probably not right now. There are people out there who. Will charge extortion fees and someone I know pretty well messaged me recently saying that their management fee, get this for those of you who invest in stock in the stock market, you will choke on what I'm about to say to you. [00:23:18] Now. They said their management fee for investing the money into crypto, where guaranteed returns would be 20. Brandy percent. Now that is complete nuts. Now, for those of you who don't invest in the stock market or have never done. Bit of reading on how how fees add up over time. And it's not the way that you think at all. [00:23:46] Otherwise, if it was then people wouldn't be so stupid as to fall for traps. And I'm not even talking about this 20% thing I'm talking about when they hear fees of like 2%, right? If you invested in a fund in the stock market with a management fee of two, that would be really high. So 20% is nuts, nuts, insane. [00:24:08] You've got index trackers as low as 0.04%. Get that 0.0. 4% you got 0.04% on like index trackers or around that, maybe up to like 0.8, about 0.0 8.1 or whatever. And then you've got reputable managed funds, which they know their prices are high, but generally speaking, they can justify it. [00:24:35] Where they around the one to 2% mark. Now I'm not gonna go into the difference between managed funds and in index trackers. It can be something that I can go into another day. If you put your comments below, I may be able to do that for you. They are different, they're different in their approach. There is a lot of evidence to show that action, putting your money in a managed fund may not actually make any sense for most investors, like most non savvy investors. [00:25:01] But anyway, we can talk about that another time, if you wish. Now, back onto the crypto myths, there are literally groups out there and I've come onto this earlier. When I said, I promised you, I would let there are groups out there where. Do something called pumping and dumping. They pump and dump they'll work together, actively in these groups on, forums on Facebook or these like dark web places. [00:25:24] And they will raise the price of a cryptocurrency like that. Boom, boom, boom, boom. And while they're doing it, they'll be generating all this hype around it. So you start hearing about it. There'll be lots of fake news about increasing even more and more in incoming months. So you better get in now because it's gonna go up like 500% in two months and where you are seeing the trends going up and up and up. [00:25:45] Up and up and up and up that you are believing this. Yes, I better get in now. And you are investing your money, maybe everything you have, because you think that this £10,000 you have is going to, turn into, I don't know. £500,000 in the next few weeks, and you can see the trend and you see where it's going. [00:26:04] So you just dump all your savings into there. Now, why is this called pump and dump? So after all the fake news, when they've got it to a pre-agreed sort of level, , they will all dump their stock whilst the buying frenzy is still going. So people are buying their, not their stock. Their crypto people are buying their crypto at extortion prices because there's all this frenzy over it. [00:26:29] They're taking your money and the, and the cryptocurrencies will nose dive. Now. This is done on like more stable cryptocurrencies, but also like extremely volatile ones, which then disappear into nothing. And there are many out there that have done that. Is it, is it fraud? I would say. So. In, if you did something like that in the stock markets, you would go to jail. [00:26:57] That's what would happen? The next thing I hear sometimes is. Crypto currencies is a better way to store your money because it's decentralized and it's safer than storing it in a bank. Now that is a load of crap. Now don't get me wrong. I do not at all. If you ever speak to me about money and the banks, I don't like the banks. [00:27:24] To be honest with you. I think they. Money grabbers and they use your money full sorts of things, and they don't actually give you any of it, but they do give you a free account. Right. But who cares? But anyway, I don't promote holding large sums of money in the bank at any time, unless it's for something that's in your immediate future where you're, you're saving for a house deposit, something like that. [00:27:49] Well you need it in the next couple of years. That's the only way that I would say hold money in the bank. If you've got a load of money in the bank for any other purpose, just because you've been told it's the safe way. Again, this is something I will be doing a video on at some point, showing people exactly why you holding money in the bank is actually losing you money over time. [00:28:12] Even though the numbers say the same, it might even have gone up by like £2 in a year. From the interest, the ridiculous interest I give you, but it will have definitely decreased. And I will do a video for a hundred percent on that at some point now in the bank, you've got $10,000, it's always gonna look like $10,000. [00:28:36] And like I said earlier, it may turn into $10,001 after a whole year of interest. Woo. Well done. You earned a. Or would it be $10? I don't know whatever. Now with crypto, if you let's say invest, let's just keep it simple. If you invested $10,000 in crypto. In exchange for the crypto currency, whatever it is, I don't care which one a year later it could be worth $250,000. [00:29:07] Right. That's great. Right. If that happens, but it could also be worth $500 that 10,000. That's not so great. It's impossible for you to know that. So for you to do that is a complete gamble, and I would suggest that you don't gamble with your money. Certainly not. If it's your life savings that you, you are gambling. [00:29:27] Now what's more, if the cryptocurrency self collapses. You lose 100% of your money at the moment. Now for the people in the UK, if our bank collapses, the government guarantees up to £85,000 of the money per bank account. That is safe currently at the time we're recording. That's what it is. So that's the difference. [00:29:51] You've got the volatile cryptocurrency that may or may not be there next year because a year ago it didn't even exist. Some kid sort of made it in their bedroom and now you've put $10,000 in there for some reason, versus a bank that's been around for years regulated, well established back by go. [00:30:10] What's a safer place really to, to hold your money. If you wanted to hold your money there, but don't get me wrong. Like I said earlier, I don't really condone holding tons of money in the bank. I would suggest it's invested in other ways, but definitely not in crypto or certainly not such a high percentage as most people seem to do. [00:30:29] So. so I'll ask you now, after I've said that, do you think cryptocurrency is a safer way to keep money in the bank? 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. [00:31:01] Not at all, not currently as it stands. But if you must call it that let's compare it. 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 that. [00:31:24] Not, not usually, I'll say usually because things like COVID happened and that had a significant impact. 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 happen around the world and stocks plummeted and everything like that. [00:31:49] But anyway, yes, they do go up and down. 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's like a real business or, theory or whatever, all these other ones that are out there, there's literally thousands out there. [00:32:12] 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, tan, tangible things to people out there in the world. these cryptos are not doing that now for most stocks, you benefit twice. [00:32:33] How'd you benefit twice. Once one, one benefit is the stock price going up and down. Generally speaking, the 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. [00:32:54] 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. [00:33:14] But in any case, most of them will also pay you a divide. If you choose for a fund, that is an 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. [00:33:31] You get back on top of your investment. So what I'm saying, it's not an investment. It, 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. [00:33:56] 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 wanna have to take the video down, so I'm not gonna say their name, but I'm sure you've got their apps and been on the website anyway, but if it is a. [00:34:13] 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 so that you grow that as quickly as you can, if you are going to invest in Bitcoin or crypto, how much should you invest? So this is another thing that you really need to think about. [00:34:35] We've all heard the term of don't put all your eggs in one basket, Aaron, you. You've probably even told that a million times 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. [00:34:53] 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. 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. [00:35:19] So don't put all your eggs in one basket. 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. [00:35:48] Which means it's no longer as profitable as it was, whatever, whatever happens, new technology. I would say a sens, a sensible portfolio might have a maximum of 5% in, and if you're extremely. If you're extremely risky as a character and you're ex you're prepared to risk a significant sum of money, maybe up to 10% of your investment portfolio into crypto, but don't do any more than that. [00:36:19] If you are someone who has like 90, a hundred percent, even more than 50% of your portfolio in crypto, I would strongly suggest that you review. Probably you go and read some books on investing and that may well change your mind. In fact, I'm gonna put some links in this, on some books that I highly recommend for investing. [00:36:41] 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. Like what would you want me to say to that? You're putting your life savings into this thing, but you. [00:36:57] You care about this money, but not enough to read about it obviously. But anyway, that's just how a lot of people are. Look, I cannot tell you how to, how you should invest your money, what you should do with it. You do what you want, it's your money. You put it exactly where you want. [00:37:17] You may, if you follow the stuff that I've been saying, and you start reading into it more and you do follow that, you may see that you lose out on a, really big rise, one time in something that you were looking at. And that may genuinely happen. And you may wish that you'd invested then. [00:37:34] And you'll come back and start screaming at me, which is why I keep reiterating. You need to do your own research. And I'm not your financial advisor. Go and get professional help. I don't know. There are really any professionals in Bitcoin or crypto out there at the moment, to be honest with you. [00:37:51] There's a lot of self-proclaimed professionals. That I'm selling you something at the end, but anyway I personally wouldn't be tempted to put all my savings in for me. How crypto is today in 2022, at the time I'm recording this, how it is today, it is just gambling. That's how I see it. I do not see it as an investment vehicle. [00:38:12] It is a gambling vehicle. For the most part it's massively unregulated that is starting to change. Do not be. Governments around the world are already looking at this. We all know that governments take a bit of time to sort of catch up with stuff, Facebook and. . I was gonna say Instagram, but MySpace and all of them companies that were way back when Bebo, if any member of Bebo way back when they had their first few years completely unregulated, they were doing whatever the hell they like until the government's caught up and then started regulating them. [00:38:49] Now, if you tried to create a, another Facebook or whatever, you're gonna have a really hard time, unless you've got some serious, serious money behind. Because you just won't be able to keep pace with the regulation. Now that is going to change in time. For sure. A hundred percent. I can like a hundred percent guarantee you that at some point the governments will be stepping in now how they see that, how they see crypto? [00:39:14] I don't know. Yes, it will be regulated cause they don't like to. They don't like to lose that control. But it's important that it's gonna be regulated for people because there are a lot of people right now who are losing a lot of money and a lot of scams going on. A lot of things that if it was being done with stocks and shares, those people would be arrested and put in jail. [00:39:34] Now I have already seen that there is regulation coming in from the United States. So there is. The the crypto platform I have still. So I still have some, a small amount of crypto. I use, I use Binance now I've slipped between a few. And when I was in the United States recently Binance wouldn't work until I used my VPN to show that actually from the UK, it just, it kept saying about a us site. [00:40:04] They've got different rules. Customers in the United States regarding crypto trading or whatever on Binance. And there might be some platforms now not listening to it. Eventually they'll end up getting shut down if they don't abide by whatever the rules are. I can't be bothered to even go and research. [00:40:20] I'm sorry if you have, or you've seen a video on those rules, feel free to put it in the show notes or in the comments or let it stay there. , but yeah, it's, it's not a safe way to store money. Crypto is not a, definitely not a safe way to store money. It's probably the most risky way that anyone could ever suggest to store money. [00:40:43] It's certainly not going, it's not got a track record of any form of any sort of, sustainable, stable growth. It's got no track record of consistent growth over. It's got these huge surges up and then these ginormous dumps down and I would be honest with you. It seems to track the stock market. [00:41:06] When I see the stock market generally go up, crypto goes up and then stock market goes down. Crypto goes down, but the downs for the stock market tend to be quite small versus the cryptos are like absolute nose. With the full FRT along, straight into the ground, like it's insane. Yes. I would be so happy if an investment of mine went up by 50 times in one year, I would be so happy. [00:41:33] And I will miss out on opportunities for sure, which goes against the aim of the podcast. But in a sense, I don't want people to take opportunities that are really just gambling, where you're risking so much. For that game and there's no science behind what you're doing at all. And I'm sure I'm absolutely certain that there will be a time, probably not too far away where I will put money into crypto. [00:42:02] Sorry, where I wouldn't have put money into crypto where I would've been tempted, but don't do it. and that would've shot up so much that I would kick myself that I'll probably be biting my fingers and being, I dunno why I bite my fingers. That's weird. But yeah, where I'd just be like, why didn't I just do it just a little bit this time, but I just think it's just too unstable. [00:42:23] It's not an investment vehicle and there's no underlying assets or company in, in it. I just don't understand how it makes any sense. It only seems to work and grow because of the hype around it. That is very much on social. But yes, I do wish I invested in Bitcoin when it was 1 cent, you know per coin, a few years back back then $5 could have made me a million errors I've already said, but as I've also said, the chances are that you would have cashed out when it got to a few hundred dollars. [00:42:52] Like most people did. If you're gonna invest in crypto, consider how much you're putting in, if it's, if it is definitely, if it's more than 10% of your entire investment portfolio, you just need to ask yourself, can you afford to lose that money? Is it gonna wipe out all your other gains in your other investments by potentially losing that money, which could happen 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 invest. [00:43:24] 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. [00:43:41] 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? [00:44:03] It may be that you come back in a few years, re. If it, 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, $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. [00:44:27] The difference between that and what crypto 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. [00:44:52] 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 $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. [00:45:24] 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? [00:45:44] Probably not. And I think part of the problem is, is that we live in this on demand culture. Now we want everything yesterday and I genuinely I've tried. I feel like I've tried everything out there. I just don't think. There is any genuine ways, reliable ways that you can get rich quick. There is. I just don't see it. [00:46:09] I don't know anyone who's really done that. Even the people who invested in crypto way back when, when it started, they didn't get rich quick. They put the, their money in and they had no idea what it would do. No, not a clue. It turned out some of these people probably just forgot. They even had it. [00:46:26] If they put in like five, $10, they probably just. And then one day we realized, oh my God, this crypto thing, let me go and find it. Oh my God. Look at how much it's worth. I don't know, but it's, I don't think there are any, I'm not aware of any genuine ways where you can just get rich quick. [00:46:44] That's easy. That's quick. It's the, and not risk risk, nothing is risk free. No investment is risk. If you invest in the stock market or anything like that, you will keep seeing that message that no investment is risk free. You could lose part or all of your money. It's all over the place. [00:47:04] They advertise that to you to let you know that investing does come with risk. Now, I've been going through my own personal journey learning about investing and all sorts of things. Obviously I have my own businesses as well, and a background in policing, which is, I. But it gives me, I dunno, guess a certain level of confidence and the ability just to talk straight and have that integrity in me to tell you the truth as how I see it. [00:47:34] I could be wrong. There could be all of what I've said or part of what I've said could be just wrong. There are people out there who will absolutely. Can, whether they believe it or if they're just, trying to keep up some scam, whatever who will tell, tell you the complete opposite of some of the stuff I've said where they will tell you to dump all their money in, give it to them because they will make you fortunes. [00:47:55] They probably won't. Well, they won't be asking a few money to do it themselves. I've been going through that journey and I genuinely believe that to build. Takes time. It takes time. It takes patience. And that's what we seem to lack today in this human race. We have, we do not have it's like we don't have, we run running out of time. [00:48:15] We've got no patience whatsoever. We want everything now. Now desperate hope of winning bigger crypto. It literally is just that it is desperation in its pure. Form blindly taking risks, with no training, no experience, no educating yourself whatsoever. Other than these people on social media, giving you the testimonials of people, whatever, do not believe that, go out there and do some objective research because you work so hard for your money, that can you really justify that you worked, people were giving away sums of money. [00:48:54] Investing sums of money, which would take an entire year or more for them to earn. And they are literally risking that in something they really don't understand. Please, don't be one of them. People at least go out there and do some research, read the books from the notes that I've included below. [00:49:12] The human mind, its desires, you know how it, rationalizes decision making will mean you are likely to fall into the trap. The trap of investing when it's really high, because that's, when you've heard about it all and you sell when it's really low and locking your losses and lose a ton of money. [00:49:31] That is what the untrained mind does. And that is something that I have been learning. Over the last six months through reading, through doing research from other sources, more reputable sources than social media to understand what's really going on and to train my own mind when I start realizing, oh, I'm doing this because of this. [00:49:55] Let me not do that. Let's wind back Aaron, have some patience, sit back. And yes, if I, if I could have made some money and I lost out on that opportunity, so what never will appear there is. , there's not a limited amount of opportunities that you'll ever have in your life. There are things all over the place constantly coming. [00:50:14] If you lose out on that one, so what, go and do something else. So a way to combat. So a way to combat that is to educate yourself. As I keep saying, train your mind, set firm rules, write down your rules. against that sort of temptation that you are going to have. So, as I've said before, I've linked the books below so that you can start working on your own financial education. [00:50:41] I'm not your financial advisor. But most of us have none. We base our decisions on absolutely no information at all, other than the fact that other people are doing it, that's irrational. It doesn't make any sense. And inevitably for most people, it ends up being the wrong decision to make. So, take that step today. [00:51:01] If you're want them, people who are really serious about investing your money and you are thinking about crypto or even just other assets. So if you're thinking about stock market or anything like that, take that time today, dedicate just a few hours, a few hours to your investment, to your money. [00:51:19] That you've worked hard for to learn a few fundamentals. Before you start risking your money. Go and buy the books that, that I've linked below in the description. Let me know your crypto stories. Let have you made money on it? Cause I don't know anyone who has really, I'm not about, I'm not about like you made £50 here, a £100 there. [00:51:39] I'm not about serious life changing money. Have you done that or do you genuinely know anyone or is it just, someone of someone who knows someone's dog, who's handsome, who's earned loads of money, what is it? Have you lost? Have that courage to say to people in this, in the description right in there, if you've lost money, have the courage. [00:51:59] If people who have lost money, have the courage to say, look, do you know what I put money in? And I lost, we don't like to talk about our losses, but just do it. because you'll help other people. People are getting these positive influences saying, oh, it's great. You're gonna ma make tons of money. [00:52:16] The same thing that you probably did if you've lost money and then you now know the truth. Of what happens for most people. And yet all these fresh people are coming in, giving away their life savings and losing money. And I don't even want to get onto, I've never looked into it on the amount of like self-harming or suicides that have occurred, where people have lost everything. [00:52:39] And I'm sure it's out there because of crypto scams. Now, if you also have any other books or recommendations to read, also leave them in the comments below. But that's everything. I'm tired. I'm extremely hot. It's so hot in here. Bye.

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