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Cryptocurrency investing. Let’s talk about it.
This particular subject can be crazy overwhelming and complicated, but today’s guest just so happens to be smart enough to help us out!
Chris from Debt Free Geek is an internet security expert by day, as well as a fellow financial independence seeker with a great debt story and an equally impressive understanding of cryptocurrency and blockchain technology.
So let’s talk crypto.
(Also, we chat about Chris’s $18,000 car “flip,” which he used to pay down an additional $11k on his mortgage.)
Chris is a brilliant and nice guy, so we hope you learn a thing or two!
Show notes and links from today’s episode
- Chris’s blog – Debt Free Geek
- Blockchain – what. are. these.
- ICO = Initial Coin Offering
- Bitcoin. Ethereum. 900+ alt coins.
- Coin Market Cap – fantastic resource site
- Reddit /r/bitcoin
- Coin Telegraph, 99 Bitcoins, The Merkle – more resources for learning about cryptocurrency
- Chris’s Crypto E-Guide (this is going to be amazing when it launches)
Key takeaways from our chat with Chris from Debt Free Geek
1 – Monitor your credit/finances with a security mindset
After learning about Chris’s dayjob (internet security director), we jokingly asked him how we could protect ourselves from future data breaches like the recent Equifax breach.
Chris did not joke back.
An obscene amount of social security numbers, birthdates, addresses, names, etc. compromised.
Just like our great-grandmother used to say, “It’s all fun and games until foreign hackers take control over your digital identity.”
Just be careful out there. Chris strongly urged everyone to closely monitor your credit reports and financial activity (which as FIRE enthusiasts, you probably already do anyways right??)
Click here to read the FTC report on “what to do” in light of data breaches like this.
2 – Chris’s car “flip”
Ok this was just fun.
Pre-FI and debt-riddled Chris bought a luxury Audi.
Post-FI and debt-free Chris SOLD said Audi for $18,000 and bought a $7,000 Honda Element, putting the $11k straight into his mortgage.
#savings.
Furthermore, 3 years later, the Element depreciated roughly $2k, while the Audi would’ve depreciated roughly $11k-$12k.
That’s insane.
Are luxury cars worth the luxury? Our vote is no. (especially when they’re purchased w/ debt).
Let’s scrap them for affordable and reliable used cars that allow us to achieve FIRE.
3 – Cryptocurrency 101
So in all honestly, you’ll probably have to listen to the podcast episode for the full effect here. Providing succinct, helpful, and actionable takeaways for a talk on cryptocurrency has proved…difficult 🙂
Still, Chris has roughly $30,000 invested in cryptocurrency. ($21k invested + gains)
#woah
The single most important takeaway from the discussion is this: be careful, and treat cryptocurrency as a high-risk high-reward investment.
Chris says to never invest more than 5% of your net worth (which can be a strange number to deal with…but the point remains).
Basically, if your invested Bitcoin or Ethereum goes to zero….tomorrow…you won’t be crushed. (the same likely goes with most higher risk investments). Limit your exposure to loss.
Also, given Chris’s speciality, let’s talk security:
As far as “wallets” go (i.e. where you store your private key used to access/identify your investment), Chris recommends a hardware wallet, such as the Amazon recommended Ledger Nano S, or the highly related YubiKey 4…both of which are very affordable.
Also, keep backups (maybe written on a piece of paper stored in your safe? I.e. not connected to the internet?)
“Your laptop is not a safe place” – Chris from Debt Free Geek
Truer words have never been spoken. And Chris should know, right? He’s a director of cybersecurity for a large financial institution…
To sum up cryptocurrency investing.
- It’s a high-risk investment at the moment. Do research and limit exposure.
- Invest in a good wallet, and it’s also wise to keep backups or your keys (think of them like passwords, except you’d never be able to remember one).
- Maybe just stay away if it’s not something your super into?
Seems smart 🙂
Did Chris melt your brain w/ all the crypto and block-chain talk? Leave us a comment!
And if you haven’t yet, come join us in the private FIRE Facebook group! We’d love to have you.
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