I’m a geek. I like geeky things. And I never made a secret out of the fact that I like, from a geeky perspective, cryptocurrencies. 10 years after Bitcoin was created, I still have my a-ha moments when I encounter some novel use of cryptography and finance, like DeFi, or NFT.
Because of this open interest in crypto, every 3 years or so, some of my friends suddenly remember my number and call me. “Hey, how you doin’ long time no hear! Listen, I heard about this new coin, ShibaInu, do you know anything about it? Should I invest? I know people who made obscene amounts of money with this thing…”
Over the years, I learned that it’s useless to answer them that my interest in crypto is predominantly technical and I have little, if any clue, about investing, lest about investing other people money. They seem not hear me, they smile, change the subject and in 5 or 10 minutes they wink and start again: “Ok, I know you said you don’t do investment advice, wink-wink, but come on, we know each other for years… How much should I put here? I do have something in my kids high-school saving fund, should I double it?”
So, because I know the conversation will always go to the point of investing, no matter how I try to convince them I don’t have a clue, I cut straight to the point and I say: “Of course, I will tell you everything I know about the coin. And I mean it, everything. But I have, you know, my little test for the people that I coach. Would you take it? It’s really just a one minute test. I guarantee that you will learn everything you need as an investor, if you take that test”.
“One minute? You bet I’m in. What should I do? Let me take some pen and paper”.
“Oh, we don’t need that, I answer. I only need a 50 EURO bill (the majority of my friends is in the EURO zone, FWIW). Just take one out from you wallet. Let’s switch to video at this point, it’s important to see you”.
Of course, they switch to video, they get out a 50 EURO bill and they suddenly become very excited.
“Now follow me very carefully, I say. Take that bill in your right hand, and go to the kitchen”.
“To the kitchen?”
“Yes, please. It’s important. Trust me”.
“Ok”, they say, and they go to the kitchen, and I can see they are in their kitchen.
“Now, open the cabined under the kitchen sink, where you keep the garbage bin, and throw the bill there”.
“Excuse me? I think we have connection issues. Did you just say something about throwing my 50 EURO bill in the garbage bin? What kind of test is that?”
And at this point they start to understand.
“If you are able to throw away your 50 EUR bill in the garbage bin, and you are ready to part ways with it, then you are ready to invest that amount in crypto.”
How many do you think they are still investing after that? How many are still interested in my opinion about ShibaInu? Almost no one.
You see, investing in this space, at this time, is incredibly risky. Prepare to consider your money lost even before you start trading. Just think about them as being in the garbage bin already. And move forward.
If you can live with that detachment, then you won’t be nudged by market moves in any direction. Your emotional entrenchment will be zero. And only if your emotional involvement is zero, you will be able to see exactly how market moves, and, from that point on, you will be able to make your own decisions. You won’t even need advice anymore.
But first, throw that bill in the garbage bin and see if you’re really prepared to lose it.
Photo by Steve Johnson on Unsplash
Initially published on my blog.