Crypto Investing #3 – Is It Risky To Invest In AltCoins And Cryptocurrencies Like Ethereum?

Eric:

Hey guys, Eric here. I’ve got Tai Zen over here, most awesome trader coach. We’ve got flashing the Bitcoin all over the place. He can’t keep his jacket closed, it keeps popping open and I wanted to ask you some questions.

Now I’ve received personally a lot of questions and I’m sure Tai received all time from friends and family members, from students, that they “Hey what is this Bitcoin, this Ethereum, cryptocurrency thing, is it risky to invest in altcoins? Is it a risky investment?”

Tai:

My answer to that is very simple. First of all, if you are living under a bridge, you have no home, you have no car, you have no clothes, and you barely have enough money to pay your rent this month or next month, then I would say that investing in Bitcoin, real estate, the futures market, the stock market, the currency market or anything is extremely risky.

However, if you are single and you do not have a wife or kids or even a girlfriend, and you have about, I would say for a single individual, if you have 3 to 4 months’ worth of savings put away to pay all your bills and your expenses every month, then for me, it’s worth it to invest into the stock market, into cryptocurrencies, into Bitcoin or anything that allows your money to grow and work for you without having to clock in and work okay.

So if you are married, I would say make sure you have like six months or 12 months’ worth of living expenses.

Eric: You got more in terms of what kind of living you have to save up, you have to save up for two people or children or whatever you have.

Tai: Yeah so for example, Eric is a single, alright. He has a girlfriend; I consider having a girlfriend single because you don’t have any kids to take care of.

Eric: I come out here, and I take care of you Tai. It’s a full-time job.

Tai: Eric is getting bromantic right there, he’s making me blush on camera. But anyway guys, if for example, like when I have kids, when I had my first one, I had six months’ worth of living expenses and then I would take a look into investing into the stock market and cryptocurrencies and all the other stuff. And then now that I have two kids, and I’ve had like three heart attacks already in my life, then the risk is a lot higher.

Eric: That cushion needs to be a lot bigger.

Tai: Yeah, so I need to have a bigger living cushion. So I have like you know, 12 months’ worth of living expenses put away so that in case something happens to me, I can pay all my bills for the next twelve months okay.

Eric:

So that’s one factor whether or not you can afford to take the risk as far as trading in the alt currencies, the cryptocurrency markets, because it is risky and I mean there is no way to eliminate that risk.

But that brings me to a very important second factor to consider, the education that you have. How educated are you in terms of what it is that you’re investing in, whether it’s real estate, whether it’s the cryptocurrency market.

If you’re going into it with zero education, understanding of how it works, you’re just throwing money on something and hoping something comes back at you. Then guess what, you’re going to have a hard time.

So you need to invest in your own education, spend out of time and watch as much content and material about that can educate you as possible, take some classes, sign up with a mentor, do whatever you can because that’s something that I take very seriously is my own education.

And it would not make sense to me because, let’s just take the stock market for example, yeah a stock market is a place where all the big banks hold all the major investing sites.

They all are major players there, and I’d like to think of those major players as guys with pockets, right. They’ve got deep pockets and their job just to take the money from your pocket and put it in their pockets.

You’re throwing money at the stock market. You’re throwing money on all this stuff and hoping that something going to land back into your pocket by luck. Then you’re taking on a whole lot of risks, and I personally believe that’s a really really dumb way to invest.

So you have to take more responsibility by investing in your education and what that will do is the more you get an education, the lower your risk will be when you start making these investments.

Tai: Yeah I mean a lot of young people that are technologically savvy that know how to use a computer, use the internet and stuff, the Millennials or I don’t know is it the Millennials or the Generation X.

Eric: I’m Gen X so I’d go with somewhere between Gen X and the Millennials.

Tai: Okay. So whichever one is the most current generation, I always forget.

Eric: You’re youngins out there.

Tai: Yeah if you’re young, you’re a teenager, you’re a college student, you live with your parents and you work part-time, you don’t have to worry about starving or not having a place to live, by all means, invest, why not? You got nothing to lose you know because I mean, look, I have my friend, he invested like a few thousand dollars at the beginning of 2013.

He invested a few thousand dollars into Bitcoin, made a bunch of money really quick and then he took that and invested that into Litecoin and made a ton of money and took that and then invested into the back into Bitcoin again. When it ran up to like a thousand or something and you know, he made like over a half a million dollars on it.

Eric: Was this guy uneducated?

Tai:

No, he’s very educated in the cryptocurrency market and stuff like that, but the risk, just remember these guys, whenever you invest in anything, whether it stock, currencies, futures, oils and commodities or into options or into cryptocurrencies, the risk is always with the individual. It’s never ever with the stock, the commodity, the currency or the cryptocurrency.

It’s always the individual and you know like Eric was talking about being educated about trading and investing, I would say that people always ask me all the time how long did it take me to learn how to trade and how much money that I spend to learn how to trade.

First of all, how long it took? Who cares? I mean it took me a year, two years, five years, who cares? The fact is I know how to trade and how to invest my money. Now I know how to make my money grow and work for me. That’s all that matters. If it took you a year, five years of ten years, it’s completely irrelevant.

That’s like you’re asking how long does it take you to learn how to speak German. How long it’d take me to learn to speak Spanish? Who cares? Once you learn it, no one can ever take your ability to speak German away from you. It’s the same thing you know. I know I’ve invested over probably close to a hundred thousand in US dollars to learn how to trade and then how to invest in the market, and I know you’ve invested over ten thousand dollars yourself.

Eric: I’ve invested over thirty thousand.

Tai: Yeah, thirty thousand dollars yourself, and I know that Eric would have invested more in himself but he didn’t. He had a friend that already invested it and he just picked my brain for. He took a shortcut so if you don’t learn then get a friend that knows and then learn from them. So that’s what I would say, guys.

But it always boils down to you and eliminates the risk. And people always ask me all the time you know, like is it worth it for you to invest all that money to learn how to trade and invest in the market? And the answer is 100% yes.

I would do it all over again because I have made back way more than that. Knowing how to trade and knowing how to invest has paid me back way more than that. So anytime I put in a dollar and I can get a dollar and 50 cents back or two dollars back, I’m always gonna do it.

Eric: I feel the same way about martial art.

Tai: Yeah so I hope guys, that answers your question of whether or not investing in Bitcoins or cryptocurrencies is it risky or if it’s safe or not, and the answer is yes and no. If you don’t know anything about Bitcoins, and you don’t know anything about cryptocurrencies, then investing in it and trading it is extremely risky, and you should not be doing it.

However, if you understand how to trade and you understand how to control your risk, you know how to take a small loss and get out whenever the price goes against you, and you know when to hold on to it and let it run in your favour so that you can get big profits, right, then I would say that no, it’s not risky okay.

Here are the other thing too guys that I want to share with you when you go to…Eric lives in Austin Texas and I used to live there for many years, and they have one of the most popular universities in America.

They’re called the University of Texas and in the city of Austin and at the University of Texas, most of our friends that go to school there, they probably invest over 50 thousand US dollars all the way up to a hundred thousand US dollars to go to school there, and so when they invest that and they come out, there’s no guarantee that they’re going to get a job.

There’s no guarantee that they’re going to make that money back and even you know, a lot of the people that we know when they come out, they usually make back about fifty or sixty thousand dollars a year in cryptocurrencies when you invest in it, like for example, do you mind if I share with them what you invested into in the lite Ethereum?

Eric: Sure.

Tai:

Okay, so Eric and I invested about $3000 each into Ethereum. We bought it with 5 Bitcoins during the IPO, and now it’s gone up to like, I don’t know 100 and some Bitcoins, like 140 or something like that as we’re speaking.

So what happens is this, is that nowhere else in the world are you going to get a 120 150 hundred per cent return on your money. There is nowhere, in the futures and commodities market, there’s nowhere in the stock market, there’s nowhere in the options market, in any market that you can risk a few dollars and make 1200, 1500% back on your money. There’s no way that is available.

Eric:

There are a few people out there that might say $3000, something like that, that might not be a huge investment, that might not be a huge risk. For other people, that might be a huge risk, that might be all your savings. So take that into account that at the time we were both in positions where one, that was not a huge financial risk for us if we lost it, we’ll be fine.

But also the pre-sale Ethers, we didn’t know what was going to happen, we didn’t know if Vitalik was going to just take the money alone. We didn’t know what was going to happen, right. All we knew is all the news, all the intel that we could get, that we could gather and the promise for us plus our contacts that just gave us enough profit to make that investment and to take that risk.

So there was a risk in the pre-sale Ethers because we didn’t see anything as far as a market or as far as any actual Ethereum for another year after making that investment before the market was released. So that was a pretty good investment for us even though it might not have been 10, 20 thousand dollars.

Tai:

Alright. So hopefully guys, this video will help you guys explain more about the risk of investing into Bitcoin and other cryptocurrencies. If you guys enjoyed this video, make sure you pause for a moment and hit the subscribe button if you haven’t subscribed to our channel already.

Second, we are planning on holding some, we occasionally do some live webinars on Google hangout and the YouTube live streams okay. We’re still trying to figure that stuff out, how to do it efficiently, so if you guys want to join us on those events, make sure that you look below this video and visit our site

And we have links there to where you can enter your name and email address and we will notify you whenever we have these live events and you can join us. It will be a great webinars event and you guys can join us and ask the questions live and we’ll help you guys the best way that we can.

We struggle to learn how to trade invest in the markets guys, and we don’t want to see other people lose a ton of money doing that. And we also enjoy you know, beating the man you know, at his own game and bringing Wall Street back to Main Street, bringing power back to the people you know, taking power away from the 1% on Wall Street and bringing it back to the people on Main Street guys.

So thanks for watching this video. Make sure you share with other friends, relatives, co-workers, and fellow investors that are interested in investing in Bitcoin and cryptocurrencies. And we’ll look forward to seeing you guys in a future video.

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