I dont trust investing, a friend said once.
I asked her why.
Isnt it kind of like playing the lottery?
Investing is intimidating enough for people as it is.
Toss in something as unpredictable as cryptocurrency, and people give up on it altogether.
It reinforces the notion that investing is like buying a bunch of scratch-offs.
But leave me out of it.
The thing about cryptocurrency, Mindel says, is that we dont understand it.
Theres no inherent value unless someones willing to pay you more.
The way I describe investment is when you invest in the stock market, what are you really buying?
Youre buying the present value of the dividends of the earning of capital gains, Mindel explained.
So when people say, I dont understand the stock market, the stock market is a gamble.
Well, its got risk associated with it but theres something to quantify.
Theres no inherent value in the commodity itself.
Theres no inherent value unless someones willing to pay you more, Mindel said.
You need something with data points and recommendations, Mindel explains.
Thats what happens when you own a company.
And for what its worth, Buffett has warned that Bitcoin is abubble, too.
But what is a bubble, exactly?
A bubble is when values get what you would call irrational, Mindel says.
The problem is, you dont know its irrational, so the prices fall.
I asked Mindel if it made sense to get it on the bubble right before it burst.
Im a horrible market timer.
If youre making a decision because of timing, youre either very smart or very lucky, he said.
Theres very few of those out there.
Its sort of the tortoise and the hare argument.
When it comes to building wealth, slow and steady almost always wins the race.
Trends like Bitcoin often enough scare people away from investing altogether.
By the time retirement rolls around, theres just not enough.
Bubbles like cryptocurrency confirm their fears.
But you have to approach it with that mentality.
