π Moonshot Investing: The Smart Way to Capture Asymmetric Upside with Bitcoin
π° The Fifth Investment: The Moonshot
After investing in yourself, diversifying with index funds, investing in real estate through REITs, and protecting your wealth with bonds... now it's time for the moonshot.
What Is a Moonshot?
- High risk, high reward
- Something that could 10x but also maybe tank
- Basically like a lottery ticket
In recent times, the best moonshot investment by far has been cryptocurrency, specifically Bitcoin.
π Bitcoin's Incredible Growth
- 2020: $10,000
- 2021: $60,000
That's a 6x return in one year! This is what I call a moonshot investment.
But at the same time, plenty of people lost their life savings by chasing random coins.
β οΈ What Most People Get Completely Wrong
When it comes to moonshot investments, most people make one of two mistakes:
Mistake 1: Going All In π²
Because human nature tends to be greedy, they go all in on something big and then lose everything.
Mistake 2: Complete Avoidance π°
Because human nature is also fearful, they avoid risk completely and lose out on massive upside.
π§ The Smart Way to Invest in Moonshots
The Core Principle: Only Invest a Small Allocation
I've never held more than 5% of my money in cryptocurrency. And most of it has always been in Bitcoin.
The logic is simple:
5% isn't enough to ruin me if it all crashes, but it's enough to capture serious upside if Bitcoin goes up a lot more as many experts are predicting.
Let's Do the Math
Think about a $10,000 tiny slice investment in Bitcoin going up 10x:
- $10,000 β $100,000
That could be:
- π Enough to do a down payment on a house
- π³ Pay off your debt
- π Pretty life-changing money
This is how millionaires think about high-risk investments. You want to make small bets with asymmetrical upside.
π‘ Why Bitcoin Is Special
Digital Gold
As central banks keep printing massive amounts of money, more and more people are starting to lose faith in fiat currency (paper money) as a good store of value.
That's why they're turning to cryptocurrencies like Bitcoin instead.
Why?
Bitcoin has a fixed supply. Governments can't devalue it by just printing more of it out of thin air like they do with dollars.
That's why it's called "digital gold."
Institutional Recognition
Although cryptocurrency used to be a wild wild west, Bitcoin has been around the longest.
Even traditional wealth management firms like Morgan Stanley and Bank of America are now advising their clients to put up to 4% of their assets into digital assets.
π The Safest Ways to Buy Bitcoin
Method 1: Use Apps Like Coinbase
- Kind of like the cryptocurrency version of Fidelity and Vanguard
- Regulated exchange
- One of the crypto brokerages that have been around the longest
Method 2: Bitcoin ETF Through Your Regular Brokerage
You can use your regular brokerage account at Fidelity or Vanguard and put your money into a Bitcoin ETF.
A Bitcoin ETF is essentially buying a stock that owns a lot of Bitcoin.
π― Moonshot Investment Summary
| Item | Details |
|---|---|
| Maximum Allocation | 5% or less of total assets |
| Primary Target | Bitcoin (oldest and most proven) |
| Goal | Asymmetric upside potential |
| Risk Management | Only amounts you can afford to lose |
| How to Buy | Coinbase or Bitcoin ETF |
π The Millionaire Mindset
What to remember about moonshot investments:
"Make small bets with asymmetrical upside."
5% is:
- β Not enough to ruin you if everything crashes
- β But enough to be life-changing if it goes 10x
π Wrapping Up All Investments
All the investments we talked aboutβyourself, index funds, REITs, bonds, and Bitcoinβcan all be started with as little as $100.
And every single one of them played a part in becoming a millionaire.
"Just pick your poison. You now have a good understanding of what investments will help you get on the path to your first million."
But knowing what to do is only half the battle. The other side of it is knowing what not to do.
The most important things in investing are:
- π― Diversification for risk management
- πͺ Self-investment for income growth
- π‘οΈ Bonds for wealth protection
- π Small moonshots for asymmetric upside
Start today! β¨
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