This post is part of a series:
Part I Part II Part III Part IV Part V Part VI Part VII Part VIII Part IX
When we left off yesterday, I had just been burned by my first investment strategy – buy the stocks Merrill Lynch says to buy.
In fact, one of those stocks went bankrupt not long after Merrill touted it. That was my wake up call.
After reflecting upon this, I pivoted to a “hard assets only” strategy. This entailed making some big changes I had been wanting to make anyway.
First, I bought a five acre property way up in the mountains. And then I bought a bunch of gold, tools, provisions, and stored food. The idea was to become as self-sufficient as possible.
This one was hard to explain at the time. But it sure came in handy when the Covid regime launched its attack on us in 2020.
And our provisions remain an asset today. They will come in handy with supply chain disruptions and the manufactured food shortage potentially heading our way in the coming months.
But the problem with the hard assets only approach is that it only goes so far. You only need so many tools and provisions. Then what?
For me, the answer was Bitcoin.
Bitcoin clicked for me in 2014 when I read The Book of Satoshi by Phil Champagne. After that I bought my first bitcoin for around $850.
Then I watched the price plunge to about $220 over the next twelve months. My holdings fell 74% in dollar terms.
But I didn’t care one bit.
That’s because Bitcoin isn’t just another financial asset. I don’t even consider it an investment.
Bitcoin is a superior form of money. It’s digital gold that can be sent from one corner of the world to the other with just a click of the button.
Except it’s far more scarce than gold. Here’s why…
Only twenty-one million bitcoins will ever exist. And as I write over 90% of them are already here.
Yet we won’t mine the last bitcoin until the year 2140.
That means the small percentage of bitcoins still out there will gradually enter circulation over the next century. It’s amazing to think about.
And that’s why I didn’t care when the value of my first bitcoins fell by 74% right out of the gate. I knew that when the world caught on to what this thing really was, the price would have no choice but to go bananas. It’s simple supply-demand economics.
But this dynamic brings with it some first world problems. What do you do when your Bitcoin value goes up 27X?
Sure, it’s nice to look at a big number sitting in your hardware wallet. But now the taxman is staring you right in the face. If you sell to harvest your gains, he’s going to rip off a huge portion of your profits.
What’s more, if you’re an American, the taxman claims the right to his portion even if you buy something using Bitcoin as the currency. Per IRS guidance, exchanging bitcoins for any good or service is treated as a sale.
So you can see the conundrum here. You may have a nice chunk of change locked up in your hardware wallet… but you can’t access that value without getting hit with a massive tax bill.
And at the same time, Bitcoin provides no yield. It’s not working for you while it sits there. You aren’t receiving a check each month to help you pay the bills.
So what do you do?
Well, it turns out the answer is very simple. You do exactly what Dave Ramsey tells you not to.
You go into debt.
We’ll talk a lot more about that tomorrow. Until then, don’t forget to check out our new video workshop Finance for Freedom. You can find it right here: https://phoenicianleague.com/workshop
The workshop outlines a robust investment system for creating financial independence. In it, we explain how anybody can go from zero to $10,000 a month in passive income every single month. It’s all about following a process. Step by step. That’s it.
And the best part is, it really doesn’t take that long.
In fact, I think some people can work up to $10,000 a month in six years or less. That’s how powerful this system is.
So please give the video a shot when you can. And if you don’t have the time, feel free to browse the transcript at your leisure. It’s all right here: https://phoenicianleague.com/workshop
But please don’t delay. Access closes at midnight on October 8.