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Brought to you by Y Refi Refinance your defaulted private student loans today@yrefi.com Ramsey.
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Today's question comes from Felix in North Dakota. Bitcoin has been going through the roof roof recently, and it looks like it's becoming more and more of a stable investment. Do you now recommend it as an investment or do you still believe it's too dangerous of an investment and that people should steer clear of it?
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Oh, good.
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Good question.
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I'm actually interested.
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Decided to, to clear the air on bitcoin because people really want to know my opinion. Said no one. Here's the deal. I've never been anti bitcoin. We took a call yesterday, Ken. Young man had every single one of his dollars in bitcoin, had nothing in savings, everything in bitcoin. And he had been doing really well. And he asked us, well, what's wrong with this? And I'm going, you've been alive for four days. So, yeah, if you just think this is how it's always going to be, then sure. But you know, we've seen things. We've seen Bitcoin drop 50% in value in 2022. It's 24 7. It's. There's a lot of fraud and scams around the crypto world right now. It's been on a wild trend up lately. And so you're going, well, why invest in the stock market to get a measly 10% when I could get 1000%? And so it really comes down to is what I call the three stooges of wealth, which trips people up, especially young people. It's fear, greed and pride. So it's the I'm. I'm so scared. There's the FOMO of I got to get in this now or else I'm going to be broke forever. There's the pride of, well, I know better. There's a little bit of arrogance there and then there's the greed of just like, I'm not going to settle for 12% and a slow way to wealth when I can make it a lot faster. And so with bitcoin, it's like investing in any single stock that's been on a wild ride. You know, you see Nvidia going up and then deep seek from China came out. Nvidia takes it. And there's all this just gyration and fear in the market of what anything's going to do. And it's why I recommend diversifying. So it really comes down to diversifying versus bitcoin equals bad and it's more that you got all your eggs in one basket. That's too much risk for one person to handle. And so if you want to invest in bitcoin, I can't say invest. If you want to speculate in bitcoin, put some money in that. After you've already invested 15% of your income into retirement, into tax advantaged retirement plans, proven mutual funds and index funds, be my guest. And use your fun money to do that. Knowing this is money you could burn on the table. But putting all the chips in on bitcoin, I'm telling you, I think history is going to show that was a very risky move. Now there's bitcoin billionaires out there who are going, haha. And they're laughing from their private islands right now. That could be the case.
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Well, I think it's here. I think, I think there's no question that cryptocurrency is here to stay.
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So as a technology, the blockchain, it's here. Yeah.
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And I would say bitcoin is here. I'm not saying bitcoin can't fall. I'm not saying I disagree with anything you said. In fact, I agree with everything I would say to somebody. Yeah, if you want to invest in bitcoin, I would treat it just like we tell people to go sit down with a smartvestor pro and learn about the strategies so that you understand what you're doing. But I agree with you that it should be a part of a diversified strategy, not all eggs in that basket. I agree with that. And that's just smart investing strategy. But I will say this. My position on crypto and bitcoin early on was it's risky right now, but there will come a day. And I still hold this. And I think Trump, by the way, is already rattling his saber on this.
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Well, he's already made a bajillion dollars doing it. He has, so of course he's a fan.
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I know. But I'm saying you're gonna see this become regulated just like banking, just like the stocks. And I think when it becomes regulated, because it will on some level, some people would take issue with me on that and I'm okay with that. I am making a prediction here, but I believe that once it's regulated, I believe it becomes far more stable. I'm not a fan of regulation as a whole, but there is, there needs to be. It's the wild, wild west right now.
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Yeah, no, I'm with you on that. I think there will be a mutual fund filled with different cryptocurrencies.
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So diversification is the answer. I agree with you. I just wanted to add that little two cents there that I don't think you should feel like, oh, it's stupid to invest in it. No, I think it's just like any other investment. You got to do your homework. What level of risk? If you sit down with a good professional, like, so we talk about the smartvestor pros that are out there. Okay. And we link to them and you can go meet them. You talk with any investment professional, one of the first things they're going to talk to you about is where are you at, where in your finances and what's your level of risk? And so I would treat any crypto thing is a high risk thing right now.
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And the other piece of this we didn't talk about is that bitcoin isn't based in anything. When you invest in a mutual fund, it's filled with 90 to 200.
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That's correct.
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Stocks of actual companies producing real products and services and real revenue.
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That's right.
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You can attribute to that. And therefore, what is it based on? Well, a lot of hype, A lot of what my buddy said. And they're investing, so it must be good.
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Well, it is a currency. It is. You're investing in a, an alternative currency and that's the bet. It's like gold, people that invest in gold. Well, you're investing in crypto.
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And the last thing I do is I go, what are actual wealthy people doing with their money? And what I found is most of them aren't saying, oh, dude, you got to get in on crypto. They might be dabbling in there with a very, very tiny percent of their world. They're not going all in on it. And so if you want to know how actual wealthy people invest, Dave Ramsey will be unpacking that in a two night virtual event called Investing Essentials. I'll be joining him. And here's the deal. We know that if you're following social media, you're going to get investing advice from a 60 second TikTok reel or Instagram reel. That's dangerous. At this virtual event over two nights, two hours a night, we're going to walk you through how to maximize your retirement plans, how to choose the right funds, how to get the most out of your money, how to invest with confidence. Plus, it's the only place you're going to hear Dave unpacking his personal playbook on, on real estate investing, which is fascinating stuff. Something he's never done here on the show. This is brand new information. You're going to get the clarity you need to invest. So join us March 4th and 5th in the comfort of your home. It's completely virtual. Tickets start at 199 bucks. Get yours today@ramseysolutions.com events or click the link in the show notes if you're on podcast or YouTube.
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Why refi refinances Delinquent Private student loans for struggling borrowers. Learn more at Y r e f y.com Ramsey.