In my last post I shared how after a very shaky start with Crypto how I was currently achieving a yield of about 7% net (after allowing for initial losses) and my funds were growing exponentially as I was writing. Like everybody my portfolio has taken a bit of a hit with the downturn in prices, but I am still in a more resilient position than I had been.
This was always intended to be a two part post and in this part I will answer the implied question that my title demands.
Aside from running a business entity historically there have been three (or maybe four) ways to invest for the future.
- Traditional Bank Savings Accounts.
- Property
- Stocks, Shares and Bonds
- And Antiques!
Let’s consider these in turn, while bearing mind my current yield of 7% over 9 weeks.
Traditional Bank Savings Accounts.
You’ve got to be kidding right? Banks are a joke and since the financial crisis and the introduction of quantitiive easing (bailouts in layman’s language) they don’t give a s*** about you the customer. They may play the game and be polite, but you hold no value to them. I hold a savings account at HSBC (yes let’s name and shame!) and they offer me a tax free return of 0.01%
Yes 0.01%
The dots and zeros are all in the right place. They even scam it by presenting it to three digital places so I might read it as a ten; 0.010%. I almost might as well keep my money in my sock.
This is a joke and it is on me!
Admittedly some banks are better than others, but you will be hard pressed to find one offering anything above inflation rates unless they have charges for running the account in which case they are giving with one hand and taking back with the other leaving you will unsustainable funds that are always going backwards.
Piracy is thriving and it is not just off the coast of Somalia!
I ask you 0.010% for a year or 7% in NINE WEEKS. It is a no brainer.
Property
Property is great and whatever bubbles form and burst over time the overall trend is always upwards so long as you keep the property in good order. Yields averaging 7% per year are to be expected and are often better.
Despite this property locks in funds, even if planning to flip a property and sell it on quickly. It is hard, expensive and time consuming, without even mentioning renovation costs. Alternatively building a rental portfolio is an option, but again your funds are locked in (even more so in this case) and you need to get a good tenant. As soon as you involve another it is risky as it is not just down to you. Tenants can wreck your property, not pay, be difficult to evict and cause all kinds of problems if you are unlucky.
I am not saying all tenants are bad and I am sure it is just a minority, but the point is valid by including tenants in your investment portfolio you are moving risk beyond your complete control and if you fail to control something it inevitably ends up controlling you.
Stocks, Shares and Bonds
To achieve returns from stocks, and bonds they often have to be locked in for a long time, but more fundamentally there is an elitism that makes it very difficult to invest in unless going through a (costly) brokerage. During the financial crisis there was a golden investment window that I wanted to leverage and I just couldn’t get in the door as much as I tried. If I had got in I would have seen a yield of 300% in about 8 months. There was absolutely no reason why I should have been blocked as I have no criminal convictions, bankruptcies or any other impediments. I wasn’t even looking to invest on other people’s behalf.
Yields are comparable and potentially better than for Crypto but this kind of trading represents snobbery at its worst. The haves want it all and access is controlled and expensive even if you do get your foot in the door.
..and Antiques!
I am almost joking in adding this one. You may get lucky and find a Rembrandt or van Gogh at a garage sale or car boot, but probably not. Antiques hold their value well, but you have to really know what you are doing or you could just end up with a crock of junk.
Secondly for a significant movement in value you have to hold for a long time, thus locking up your capital.
I recently saw on the Antiques Roadshow (BBC) an antique World War I machine gun that had been decommissioned (its firing mechanism had been disabled). If I remember correctly he’d paid ?1000 for it, but it was worth absolutely nothing, there wasn’t even any scrap value on it. The owner was clearly gutted even though he fronted it out by saying it wasn’t about the money.
Talking of machine guns here come my Crypto bullets…
- High market volatility makes leveraging profits quite easy
- Overall trend is up and profits can be released quite quickly
- Implementation of clear strategies can streamline profit release
- Crypto trading can start with micro-amounts
- Funds are not locked in long term unless you want them to be.
- There is no snobbery and thanks to an abudance of exchanges any one can get involved.
- There is plenty of crypto education about on YouTube and sites like PUBLISH0X where bloggers share experience and knowledge extensively.
- Specialised knowledge can help (eg understanding Blockchain), but isn’t necessary to get on.
And that is why it is Crypto for me all the way!!!
Disclaimer
It is always important to add this bit so bear with me. Always remember the value of any investment is subject to movement and losses are a very real risk. Invest carefully and never more than you are willing to lose in total.
All the best and I hope you enjoyed reading.
