Wealth Building Tip of the Day:
Recently, I stumbled upon this article: “After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors.”
Remember the Bitcoin/cryptocurrency explosion a few months ago? Back then, just about everyone began asking financial experts if they should invest in it. At the time, some well-known experts were saying what a great investment it was. And now...silence.
Let me be clear. I myself am not an investment expert. But I do know that it is absolutely necessary to invest to create long lasting wealth. I invest. Investing creates wealth in a way that regular savings accounts do not. But as with all your wealth building practices, you need to proceed in an INFORMED and wise manner.
The article talks about several people who used their savings to invest in Bitcoin. One woman (and mom) used her savings, an insurance policy and took out a loan to invest in cryptocurrencies. At the time the article was written, she saw her investments drop 90%. One man took $100,000 out of his savings to buy Bitcoin and saw its value drastically drop. They – and other individuals – lost tens of thousands of dollars. It is NOT a wise strategy to take money from your savings to invest in high risk funds.
When it comes to your savings, you should always have a few different types of savings accounts. You should have set purposes for each. Then you’ll be clear on what you are saving for and why. And what money you want to invest. Once you decide what you want to – and can actually – invest, you should invest using your disposable income/extra money left over. NOT your savings.
The way to succeed in investing is not to jump on what’s “hot” at the moment, but to become knowledgeable about how to invest. In most cases, you will need to invest FIRST in working with a financial expert to help you learn.
But THAT is an investment well worth making to create long lasting and true wealth, which won’t quickly lose its value.