COIN IPO & The Future of Crypto
Most people fail to realize that in life, it’s not how much money you make. It’s how much money you keep.
We’ve all heard stories of lottery winners who were once poor, then suddenly rich, and then poor again.
In 1923, a group of our greatest leaders and richest businessmen held a meeting at the Edgewater Beach hotel in Chicago. Among them were:
- Charles Schwab, head of the largest independent steel company;
- Samuel Insull, president of the world’s largest utility;
- Howard Hopson, head of the largest gas company;
- Ivar Kreuger, president of International Match Co., one of the world’s largest companies at that time;
- Leon Frazier, president of the Bank of International Settlements;
- Richard Whitney, president of the New York Stock Exchange;
- Arthur Cotton and Jesse Livermore, two of the biggest stock speculators; and
- Albert Fall, a member of President Harding’s cabinet.
Twenty-five years later, nine of these titans ended their lives as follows: Schwab died penniless after living for five years on borrowed money. Insull died broke in a foreign land, and Kreuger and Cotton also died broke. Hopson went insane. Whitney and Albert Fall were released from prison, and Fraser and Livermore committed suicide.
I doubt if anyone can say what happened to these men. If you look at the date, 1923, it was just before the 1929 market crash and the Great Depression, which I suspect had a great impact on these men and their lives.
The point is this: Today we live in times of greater and faster change than these men did.
I suspect there will be many booms and busts in the coming years that will parallel the ups and downs these men faced.
I am concerned that too many people are too focused on money and not on their greatest wealth, their education.
If people are prepared to be flexible, keep an open mind and learn, they will grow richer and richer despite tough changes. If they think money will solve problems, they will have a rough ride. Intelligence solves problems and produces money. Money without financial intelligence is money soon gone.
Boomers vs. Millennials
Sometimes life just isn’t fair. When I was growing up in the 1960s, my parents said to me, “Listen to your elders. You need to learn to respect their wisdom. Someday when you’re older, young people will listen to you.” So, I listened to my parents and grew up respecting the wisdom of those older than I was. But that notion has been turned upside down: Nowadays, people my age need to listen to and respect the wisdom of people who are younger than we are.
Ideas from an earlier age in investing, success often depends upon the relative age of your ideas. Today, people of all ages are in trouble because their ideas aren’t just old, they’re obsolete.
One example of an old idea is that of the traditional job. Jobs are a centuries-old concept created during the industrial revolution. Despite the reality that we’re now deep in the Information Age, many people are studying for, or working at, or clinging to the Industrial Age idea of a safe, secure job. Now people aren’t just losing their jobs — their jobs are migrating to foreign countries or disappearing altogether.
As Alan Blinder, an economist and former vice-chairman of the Board of Governors of the Federal Reserve System, says, “A new industrial revolution—communication technology that allows services to be delivered electronically from afar—will put as many over 40 million American jobs at risk of being shipped out of this country in the next decade or two.” That’s double the number of U.S. workers in manufacturing today.
Despite such alarming figures, our schools still program kids to look for jobs. Advising people to go to school to learn to be an employee is as obsolete as advising young people to become peasants and work for a landlord. People need to be trained to be investors and entrepreneurs, not employees.
My point is this: In a rapidly changing world, nothing is more dangerous than an idea whose time has come and gone.
Just look at how Amazon.com has changed the world of brick-and-mortar booksellers such as Borders and Barnes & Noble, or how Zoom is tearing down how monster corporations run their businesses.
Where do you think the people who work for those Industrial Age employers will be in 10 years?
The Future Of Finance
While many my age think of investing as an action done in the stock market, or real estate, or gold, the reality is crypto investing may be where we need to get educated and start understanding.
To my generation the idea of Bitcoin and cryptocurrencies is scary. It does not make sense to us. We ask ourselves, “How can money be made out of thin air? What is digital money?”
Why am I so interested in Bitcoin and cryptocurrencies? The same reason I love gold and silver. Both are outside of the Federal Reserve Bank’s control.
As cryptocurrencies—people’s money—evolve, the power of the banking system will lose its grip on the financial freedom of the world.
Think about this: In 1971, the year Nixon took the dollar off the gold standard, the dollar became fake money. Imagine billions of people borrowing and depositing billions of fake dollars in banks all over the world.
Central banks are run by the “controlling elite”. These elites do not like gold because central banks cannot print gold.
Central banks do not like Bitcoin and blockchain because people’s money does not need central banks.
That is why cyber money, people’s money, is such a threat. Many cryptocurrency miners and developers are driven by an intense desire, a passion (and in some cases a hatred) to bring down the invisible leaders or “controlling elite”.
The Cryptocurrency Show
Cryptocurrencies appear to have just gained incredible acceptance into our society. As Paul Todor Jones said, “I think we are in the first inning of Bitcoin and it’s got a long way to go.”
Like Paul, I believe the cryptocurrency is the best hedge against inflation and would even compare investing in Bitcoin now to investing in early tech stocks, like Apple and Google.
Here are just a few examples of societal acceptance popping up all over the place…
PayPal, with 300 million users, has announced that it will be accepting certain cryptocurrencies as a form of payment on its platform. Additionally, users have been able to buy, sell, hold their crypto on its platform for months now.
Coinbase Credit Cards
Coinbase is the first real United States major credit card that can spend crypto on your behalf.
It’ll still charge you an exchange fee, but now anyone with this card can earn 4% in crypto as well as use their crypto holdings with any vendor that accepts credit cards.
In the financial sector, JPMorgan, the United States’ largest bank, announced they were building a blockchain group targeting mainstream users to spend and transact JPMorgan coins with each other.
And, finally, like we discussed yesterday, Tesla also spent $1.5 billion earlier this year buying up Bitcoin. And, Elon Musk announced that it is now possible to buy Tesla vehicles in the U.S. with Bitcoin.
The change is upon us. Whether you catch the wave or drown in it is up to you.
Editor, Rich Dad Poor Dad Daily