You’ve probably heard someone say, “Renting is just throwing money away.” And while that makes for a catchy soundbite, it’s not always true. There are plenty of reasons why renting can be the smarter move—just like there comes a point when buying makes more sense. The challenge is figuring out when that shift happens for you, not your coworker, not your cousin, not your favorite financial influencer—you. Because timing a home purchase isn’t just about interest rates or Instagram aesthetics. It’s about the messier, real-life math and mindset that tell you it might be time to trade rent checks for a mortgage.
You’ve Built a Solid Emergency Cushion
Let’s be real—owning a home means stuff will break, usually at the worst possible time. Whether it’s a leaking roof or a surprise furnace meltdown, you’ll need money on hand to handle it. If you’ve got an emergency fund that covers at least three to six months of expenses, you’re in a stronger position to take on the unknowns of ownership. That cushion is your financial safety net, and if it’s solid, it means you might be ready to leave the rent game behind.
Your Rent Is Creeping Up Faster Than Your Paycheck
There comes a point when renewing your lease feels like a financial gut punch. If your rent keeps rising year after year while your income only inches up, that’s a signal. Owning a home can lock in your monthly costs with a fixed-rate mortgage, giving you a sense of predictability you just can’t get with renting. When the rent-versus-buy calculator starts tipping in favor of buying over the long run, it’s time to run the numbers more seriously.
Ownership Comes With Hidden Costs You Didn’t Pay as a Renter
When you’re renting, it’s easy to take for granted that someone else is footing the bill when your dishwasher breaks or the water heater dies. But once you own, that safety net disappears, and the cost of repairs or full-on replacements can hit hard—especially when they all seem to happen at once. For first-time buyers who aren’t used to shelling out for these kinds of surprises, services offering home appliance coverage for consumers can create a buffer, helping reduce the financial uncertainty that comes with ownership. It won’t eliminate every bill, but it can take the edge off and bring a little predictability.
You’re Sticking Around for a While
Buying a home is a bit like planting roots—you don’t do it if you plan to move in a year or two. If your life feels stable in terms of career, community, and personal relationships, homeownership can start making sense. The upfront costs of buying are high, but if you’re going to be in the same spot for five years or more, those costs start to even out. Think of it like a relationship: commitment matters if you’re going to take the plunge.
You Can Afford More Than Just the Mortgage
One of the biggest mistakes people make is thinking the monthly mortgage is the only cost to factor in. There’s property tax, insurance, HOA fees, maintenance, and yes, the occasional plumber who charges weekend rates because, of course, your pipes waited until Saturday to burst. If you’ve crunched the numbers and can comfortably cover all those extras without wiping out your checking account, then you’re looking at a clearer green light to buy. Otherwise, renting might still be the safer route.
You’re Mentally Ready to Be the Landlord Now
This isn’t a line item on a spreadsheet, but it’s just as important. Owning means you’re the one calling the shot when things go wrong. You don’t get to submit a maintenance ticket and wait. You’re the ticket. If the thought of handling repairs, lawn care, and all the little responsibilities that come with owning doesn’t overwhelm you, that’s a big mental shift in the right direction. Financial readiness is one piece—emotional bandwidth is another.
The Market Isn’t Working Against You
Even if you’re personally ready, the market might not be. Maybe home prices are bloated in your area, or interest rates are spiking, or inventory is so low you’re being outbid by cash buyers who don’t even blink. If the numbers feel stacked against you right now, there’s nothing wrong with waiting. In fact, patience can be a financial power move. But if the market cools, or you find a sweet spot where buying actually costs you less than renting long-term, that’s your moment to dig in.
You Want to Build Something, Not Just Pay for It
Renting is like borrowing someone else’s dream. Buying means you get to build your own. That might sound cheesy, but it’s real—homeownership gives you a shot at growing equity, customizing your space, and maybe turning your biggest expense into an investment over time. If you’re craving something more permanent, something that actually returns value to you beyond just shelter, then buying could be your next financial milestone.
There’s no universal answer to when renting stops making sense. It’s a mix of math, mindset, and where you’re at in life. What matters is that you take the time to zoom out and see the whole picture—not just the mortgage calculator or the Pinterest boards, but the day-to-day realities. If your finances, lifestyle, and future goals are aligning, that’s your sign. Not from a TikTok guru or a bank flyer—but from your own honest assessment of what’s right for you.
Ted James is a husband, father, dog owner, and rock climber living in the Pacific Northwest who devotes a large chunk of his time helping people get back in the driver’s seat of their finances. He created his site, Ted Knows Money, to share money tips and help people get complete control of their finances.
And if you haven’t done so already, get my book and learn how to plant your own money tree.
Developing a strong and healthy relationship with money is about more than just earning and spending—it’s about cultivating financial habits that support long-term stability, security, and freedom. Many people struggle with financial anxiety, impulsive spending, or simply feeling like they don’t have enough, but these challenges can be overcome with intentionality and knowledge.
Establish a Budget That Works fr You Your
A budget isn’t a financial punishment—it’s a tool for clarity, freedom, and control. Creating a budget allows you to see exactly where your money is going and how it can work for you instead of against you. By outlining your income, expenses, and savings goals, you create a financial roadmap that aligns with your priorities. The key to sticking to a budget is flexibility—adjust it as your needs change and ensure it supports, rather than restricts, your lifestyle.
Define Your Short-Term and Long-Term Goals
Without financial goals, it’s easy to drift aimlessly through life without making meaningful progress. Establishing both short-term and long-term objectives provides motivation and a sense of direction in your financial journey. Short-term goals might include building an emergency fund, paying off a specific debt, or saving for a vacation, while long-term goals could involve homeownership, retirement savings, or financial independence.
Aligning Career Choices with Financial Goals
Choosing a career that aligns with your financial goals ensures that your professional path supports the lifestyle and security you envision. Earning an online degree can boost your income while giving you the flexibility to work while you learn, allowing you to invest in your future without sacrificing your current responsibilities. If you’re interested in leadership roles within the healthcare sector, earning a master’s degree in health administration can develop your healthcare knowledge and expertise as a leader. To take the next step, you can find a healthcare administration program online that fits your schedule and career aspirations.
Make Saving a Non-Negotiable Habit
One of the most effective ways to build financial security is by making saving a regular, automatic habit. Instead of treating savings as an afterthought, prioritize it as a necessary expense by setting aside a portion of your income consistently. Automating savings through direct transfers into a separate account can remove the temptation to spend the extra money. Even small, consistent contributions add up over time, giving you a safety net that allows for financial freedom and peace of mind. It’s also helpful to establish an emergency fund.
Commit to Lifelong Financial Education
The more you understand money, the better equipped you are to make informed, confident financial decisions. Financial literacy isn’t something you learn once and forget—it’s an ongoing process that evolves with your financial situation. Reading books, listening to podcasts, attending financial workshops, or working with a financial advisor can help you stay informed about investment strategies, retirement planning, and money management techniques. Knowledge is power, and in the financial world, that power translates into long-term security and growth..
Practice Mindful Spending
Spending money isn’t the problem—spending money without intention is. Mindful spending is about aligning your purchases with your values, ensuring that every dollar you spend enhances your life in a meaningful way. Instead of falling into the trap of impulse buys or keeping up with societal expectations, take a step back and ask yourself whether a purchase truly adds value. When you spend with purpose, you not only protect your financial well-being but also cultivate a deeper sense of satisfaction with what you already have.
Reframe Limiting Beliefs About Money
Your mindset around money plays a crucial role in your financial reality. Many people carry limiting beliefs about money, such as “I’ll never be rich,” “Money is evil,” or “I’m just not good with money.” These beliefs can sabotage financial growth by creating a scarcity mindset that prevents you from taking positive action. Reframing these thoughts into empowering beliefs—such as “I have the ability to create wealth” or “Money is a tool that allows me to live well and help others”—can transform your financial outlook and behaviors.
Your mindset around money plays a crucial role in your financial reality. Many people carry limiting beliefs about money, such as “I’ll never be rich,” “Money is evil,” or “I’m just not good with money.” These beliefs can sabotage financial growth by creating a scarcity mindset that prevents you from taking positive action. Reframing these thoughts into empowering beliefs—such as “I have the ability to create wealth” or “Money is a tool that allows me to live well and help others”—can transform your financial outlook and behaviors.
Unlock the secrets to financial freedom and secure your future by visiting the Millennial Money Tree Blog!
Ted James is a husband, father, dog owner, and rock climber living in the Pacific Northwest who devotes a large chunk of his time helping people get back in the driver’s seat of their finances. He created his site, Ted Knows Money, to share money tips and help people get complete control of their finances.
In a report released right before the election last year, Goldman Sachs, a cornerstone of Wallstreet and heavyweight in investment banking, securities, and investment management, made a forecast that has left investors flummoxed.
Here’s what they said in the first bullet point of the report:
“We estimate the S&P 500 will deliver an annualized nominal total return of 3% during the next 10 years (7th percentile since 1930) and roughly 1% on a real basis. Annualized nominal returns between -1% and +7% represents a range of likely outcomes around our baseline forecast and reflects the uncertainty inherent in forecasting the future. During the past decade the S&P 500 posted a 13% annualized total return (58th percentile)”
Just 3% a year for the next decade and a minuscule 1% after adjusting for inflation?
That is naturally both surprising and alarming for investors who are heavily invested in stocks. Over a decade, a 3% annualized return estimate would mean a total return of just 34%. Those are only estimates of course, but they imply the equivalent of nearly another “Lost Decade” for stocks and one of the worst stretches since the Great Depression of the 1930s.
Goldman’s research indicates that bonds are 72% likely to outperform stocks over the next decade.
This is a huge shift from the traditional belief that stocks normally outperform bonds over the long term. And, bonds offer this higher return potential with a fraction of the risk associated with stocks.
Current data points, however, show that the economy is strong. Corporations are reporting solid earnings growth, and the Fed is planning to lower interest rates, which typically fuels growth in the stock market. However, last year’s 23% upswing was concentrated in just a handful of the biggest technology stocks, referred to as ‘the Magnificent Seven,’ led by companies like GPU maker Nvidia and Alphabet (Google’s parent company). The report emphasizes that it is difficult for any firm to sustain high levels of sales growth that equates to juicier profit margins over extended periods.
Importantly, the forecast does not suggest that we are heading towards a recession. Instead, it is based on two key factors.
The first is valuation: Goldman Sachs leans into the Cyclically Adjusted Price to Earnings (CAPE) ratio, a valuation measure used to predict future returns from equities over 10 to 20 years. According to the current CAPE ratio, stocks have only been more expensive 3% of the time throughout history. This strongly suggests that stocks are currently overpriced, which could limit their future returns.
The second factor is the over-concentration in tech stocks: Tech companies have been the star performers in recent years, driving up stock market indices. However, Goldman Sachs believes these tech companies will likely face increased competition in the future, which could limit their growth and, consequently, their contribution to stock market returns. Since they equate to a third of the S&P’s value, that could certainly have dire consequences.
This forecast is particularly noteworthy because the firm has no vested interest in promoting bonds over stocks. Like most investment firms, Goldman Sachs benefits primarily from higher stock prices. So this is no marketing ploy, which makes their prediction even more compelling and worthy of serious consideration by investors.
I will note though, that in the report, Goldman admitted that “Historically, our model has done a poor job of explaining returns across periods containing large shocks to the economic backdrop or periods of rapid technological change.” And it’s pretty obvious that what they’re saying indirectly is that, sometime in the next 10 years, the S&P is going to experience an epic fall, much like the financial crisis in 2008-9. At least that’s what their math concludes – as well as their model per their report.
Again, even their best case shows only 7%.
Going back decades, stocks have returned around 10% on an annualized basis.
There are a number of factors that could contribute to the S&P 500’s underperformance in the coming years. One is any rise in interest rates. Higher interest rates make it more expensive for companies to borrow money, which can slow down economic growth and hurt corporate profits. Another factor is the ongoing trade war between the United States and China. The trade war has disrupted global supply chains and raised costs for businesses. Trump’s plans for tariffs might have the same effect. This could also hurt corporate profits and weigh on the stock market.
What are the odds of a big crash within the next decade?
Pretty high actually, if history is taken into consideration. Since 1900, according to Morningstar and Investopedia, the market has had a pattern of crashing every 7 to 8 years. While 2022 was bad, it was a correction, not a full-on crash. It’s not an exact science, but there seems to be enough data to at least mention it. And oddly enough, their prediction coincides with another forecast made way back in 1875 by Samuel Benner.
Which has been surprisingly accurate for over a century.
Of course, there are also a number of factors that could lead to the S&P 500 outperforming Goldman Sachs’s expectations. One is the strong U.S. economy. The economy is currently growing at a healthy pace and unemployment is low. This could lead to continued growth in corporate profits and support the stock market. Another factor is the Federal Reserve’s dovish stance on interest rates. The Fed has indicated that it is willing to be patient in raising rates, which could help to support the stock market.
“See, we alerted everyone and people took steps to avoid the calamity.“
All that said, I always find it hilarious that the people who make these kinds of economic forecasts never, ever, admit they were wrong. Especially with regard to dire forecasts like this. If it does behave remotely like what they say it will, they’ll say “We warned you!”. And if it does the opposite, meaning better than their forecast, they’ll say “See, we alerted everyone and people took steps to avoid the calamity.”
Ultimately, the S&P 500’s performance over the next decade will depend on a number of factors as described above. But Goldman Sachs’s forecast is just one reason people are looking at other assets, like precious metals and crypto currencies, as a hedge against both downturns and inflation.
My favorite, of course, is Bitcoin. Compare Bitcoin’s potential future returns to all your other investments’ potential future returns. Be conservative on BTC returns. Be generous on the S&P 500’s returns. Keep analyzing. Keep running the numbers. And if you’re like me, you’ll start to wonder why you had 90+% of your investment savings in assets you fully expected to underperform Bitcoin.
The more I studied, the harder it became to NOT be all in. But that’s just me. Make the comparison on your own. Ignore all the Dr. Doom-like Peter Schiffs out there that say Bitcoin won’t live up to its predictable future.
Then wait until you have years of your own portfolio returns telling you the same thing you might be starting to realize now. You’ll be mad that you didn’t buy more BTC sooner. I sure was.
But chances are good that (even years from now) you’ll still be labeled as crazy because so few people will understand what you will so clearly understand.
Below is a link to a 10 minute interview with Goldman Sachs Chief US Equity Strategist, David Kostin, explaining their reasons for that prediction.
Financial stress can significantly disrupt your peace of mind, yet adopting concrete strategies can help you regain control and enhance your financial stability. These methods not only provide relief but also empower you to build a more secure financial future. By understanding and implementing effective financial management techniques, you can start to alleviate the pressures of financial uncertainty. This guide outlines essential practices that can help stabilize your financial situation and reduce stress.
Creating a Robust Emergency Fund
Having a solid emergency plan is crucial for reducing financial stress. Start by setting aside a small portion of your income each month into a savings account specifically for emergencies. Aim to build a fund that can cover three to six months of living expenses. This cushion can help you handle unexpected expenses like medical bills or car repairs without resorting to credit cards or loans. Review and adjust your emergency plan regularly to ensure it meets your evolving needs.
Embracing Remote Work
Working from home can be a pivotal strategy in mitigating financial stress. By cutting out the daily commute, you not only save on fuel costs but also lessen the wear and tear on your vehicle. Additionally, the casual dress code of home offices can significantly reduce your spending on work attire. The tranquility of a home environment tends to enhance focus and relaxation, boosting productivity which can lead to career growth and further financial stability..
Practicing Mindful Spending Habits
Mindful spending is essential for managing financial stress. Begin by tracking your expenses to understand where your money goes each month. Identify non-essential purchases and find ways to cut back. Setting a budget can help you stay on track. Allocate funds for necessary expenses first, then designate an amount for discretionary spending. This approach helps you prioritize your spending and avoid impulsive purchases that can lead to financial strain.
Consolidating Debt for Simplicity
Debt consolidation can be an effective strategy to reduce financial stress. By combining multiple debts into a single payment, you can simplify your financial obligations and potentially lower your interest rates. Look for consolidation options that offer favorable terms and consider seeking advice from a financial advisor to ensure this strategy aligns with your long-term financial goals. Regularly monitoring your progress can keep you motivated and on track to becoming debt-free.
Maximizing Savings with Sales and Coupons
Shopping sales and using coupons can significantly reduce your expenses. Plan your shopping around sales events and take advantage of discounts and promotions. Using coupons, both digital and paper, can add up to substantial savings over time. Compare prices across different stores and be strategic about when and where you shop. This approach can help you stretch your budget further and reduce the financial stress associated with everyday purchases.
The Power of Downsizing
Downsizing can be a practical solution for alleviating financial stress. Evaluate your living situation and consider whether a smaller home or apartment might be more cost-effective. Reducing housing costs can free up funds for other essential expenses or savings. Additionally, downsizing can simplify your life by reducing maintenance and utility costs. This approach can provide a sense of financial freedom and peace of mind.
Focusing on Controllable Factors
Focusing on what you can control is vital for managing financial stress. Identify areas of your financial life where you can make improvements, such as cutting unnecessary expenses or increasing your income through side gigs or additional work. Avoid stressing over factors beyond your control, like market fluctuations or economic downturns. Instead, channel your energy into actions that can positively impact your financial situation. Setting realistic goals and regularly reviewing your progress can help you stay motivated and focused.
By adopting these strategies, you can take proactive steps to reduce financial stress and gain better control over your finances. Establishing an emergency plan, practicing mindful spending, consolidating debt, shopping sales, embracing remote work, downsizing, and focusing on controllable factors can provide a solid foundation for financial stability. Implement these practices to achieve a more secure and stress-free financial future.
Millennial Money Tree is here to help you save better and spend more consciously. Let us know if you have any questions!
Ted James is a husband, father, dog owner, and rock climber living in the Pacific Northwest who devotes a large chunk of his time helping people get back in the driver’s seat of their finances. He created his site, Ted Knows Money, to share money tips and help people get complete control of their finances.
Yeah, that’s right. There are pros and cons to owning the King of Cryptos.
And because everyone’s investment risk profile is different, there is no “one size fits all” guaranteed investment philosophy for investing in Bitcoin. These are MY opinions – shared by plenty on both sides of the turf – but you’ll have to make up your own mind as to which make more sense for you.
It doesn’t matter where you are on your investment timeline.
Just beginning to accumulate or earnestly working to preserve, reallocate and grow what you already have as you enjoy your golden years, first up – here are six key reasons why Bitcoin is poised, once again, to exceed market expectations in the coming months and why YOU should own some.
Reason #1: Price Elasticity/Market Resilience
Put aside everything you think you know about cryptocurrency. What if I told you there was an asset that defied all expectations and has thrived amidst market chaos?
When markets sink and panicked investors scramble for a life preserver, Bitcoin has often emerged as a lifeline of safety.
Skeptical?
During the 2018 bear market, while the S&P 500 fell by 6%, Bitcoin’s price increased by 80%.
When COVID-19 hit and the market tanked in March 2020, although Bitcoin dropped alongside traditional markets it bounced back much faster. By the end of 2020, Bitcoin had surged over 300%, outperforming ALL other asset classes.
Now, I know what you’re thinking – 2022.
Bitcoin tanked along with the S&P 500 at the end of 2021 going down from an all-time high of $69,420 to a bottom in November of 2022 of $15,599 – a 78.82% drop – while the S&P lost only 19.44% in 2022.
That’s a huge difference! Imagine losing more than 3/4 of your nest egg!
Who wouldn’t panic?
Not to mention that the S&P recovered quickly and to-date (May 1st 2024) is back up by over 30%.
Bitcoin? Went from that $15.6K bottom to a new all-time high of $73,650 in March of 2024 and has now settled back down to just over $59,000 today – a 280% GAIN – almost 10X what the S&P did in the same timeframe.
Yep. Fortune favors the brave.
This undeniable resilience is due in part to Bitcoin’s decentralized ecosystem. It’s not tied to any particular economy or government, making it less susceptible to geopolitical events or monetary policy decisions that make traditional markets tremble and fall.
Volatile? Compared to the S&P? Heck yeah.
Yet, Bitcoin’s consistent recovery after market downturns is just the beginning of its story. As impressive as Bitcoin’s past performance has been, there’s an even more powerful change agent that could send Bitcoin’s price into rarified air once more: the ‘Halving’.
Reason #2: The Halving and Its Impact on Value
Imagine a built-in mechanism that periodically slashes the supply of a finite commodity, creating a shock of scarcity that ripples through the market.
And the timing of that shock wave is known well in advance.
That’s the power of each Bitcoin halving. Each halving cuts the reward that is handed to Bitcoin miners who solve the algorithmic riddle by half, thereby stemming inflation.
Bitcoin’s halving dates, which occur roughly every four years, have consistently been followed by hockey stick, God candle bull markets. The latest halving happened this past April 19th.
Take a look at halvings in the past and how Bitcoin’s price reacted:
First halving (November 2012): Bitcoin’s price increased from $12 to $1,184 in twelve months, a gain of 9,587%
Second halving (July 2016): Bitcoin increased from $651 to $19,326 within 18 months, a gain of 2,971%
Third halving (May 2020): BTC increased from $8,821 to $64,800 within a year, and to $69,420 just a few months later, a gain of 787%.
Fourth halving (April 2024) Bitcoin’s price on this most recent halving day was $63,844. Obviously, history suggests we could see Bitcoin’s price jump again.
Some analysts, like Plan B, who created the now well-known Bitcoin Stock-to-Flow model, predict Bitcoin could reach close to $300,000 or more by 2025, just shy of 5X the price on halving day.
Which makes perfect sense considering the diminishing returns that each cycle has shown as it matures.
However, further on, seven-figure price targets are also emerging. One of the most well-known is from Ark Invest’s CEO, Cathie Wood, who now sees a Bitcoin price of $1 million as too conservative by 2030.
But the halving isn’t the only factor driving Bitcoin’s growth. There’s a tidal wave of institutional money flowing into the market, and it has the potential to change the game entirely.
Reason #3: Increasing Institutional Adoption
From Wall Street to Main Street, the big dogs have finally awakened to Bitcoin’s potential. And following right behind are the “Average Joe” retail investors.
And they’re not just dipping their toes in the water — they’re diving in headfirst.
In 2020, MicroStrategy invested $425 million into Bitcoin, with CEO Michael Saylor calling it “the best money ever created.” MicroStrategy now holds approximately 214,246 BTC (worth $13.8 billion at current prices), which is more than 1% of ALL the 21 million bitcoin that will ever exist.
Square followed suit, allocating $50 million of its cash reserves to Bitcoin.
And in early 2021, Tesla made waves by purchasing $1.5 billion worth of Bitcoin.
But it’s not just corporations buying chunks of the Bitcoin pile. PayPal now allows its 350+ million users to buy, sell and hold cryptocurrencies.
And Visa has integrated Bitcoin into its global payment network. The new integration allows users to withdraw cryptocurrencies like Bitcoin directly from a wallet like MetaMask to a Visa debit card.
And nearly a dozen major financial institutions like BlackRock, Fidelity, Grayscale and other huge investment companies have launched various Bitcoin based ETFs for their clients. These Spot ETFs debuted in the U.S. on January 11 with much fanfare, promising to pull billions of dollars in institutional money.
To date, they’ve more than lived up to that hype, exceeding everyone’s expectations. BlackRock’s IBIT alone has amassed more than $15 billion, while the twenty-four other funds taken together have registered a net inflow of over $12 billion.
And an interesting aspect of Blackrock’s inflow’s in the first several months is that nearly 90% of that money has been coming from retail investors (John Q Public) not the huge pension funds, uber wealthy family offices and other big money managers…just yet.
According to renowned analyst Willy Woo, Bitcoin is on the verge of a monumental leap, expecting it to match the Internet’s growth trajectory from 1997 to 2005.
Woo believes this tectonic shift in adoption has been brewing for years.
“1 billion people will own Bitcoin by the end of this cycle,” Woo said.
He highlighted the digital currency’s accelerated adoption rate, which outpaces that of the early Internet.
The influx of institutional money is a game-changer. As result, we saw an unprecedented new all-time high just months before the halving. That’s NEVER happened. Not even close.
Now, Hong Kong just introduced its own crypto ETFs.
Considering the Asian cryptocurrency market is the size of the North and South American AND European crypto markets combined? That’s going to be an awful lot more money potentially flowing into the Bitcoin network.
As more institutional players enter the market, they bring increased liquidity, stability and mainstream credibility to Bitcoin. However, it’s not the only factor driving Bitcoin’s adoption. Behind the scenes, Bitcoin’s technology is evolving at a rapid pace.
Reason #4: Technological Advancements and Network Effects
Bitcoin isn’t just digital gold — it’s a living, breathing technology that’s constantly evolving.
And with each upgrade, Bitcoin becomes more valuable, useful, and unstoppable.
The 2021 Taproot upgrade was a significant improvement to the previous Bitcoin protocol that was activated in 2017. It demonstrated the ongoing evolution of the Bitcoin protocol to meet the growing demands and challenges of the digital currency ecosystem. This Taproot upgrade introduced improvements in privacy, efficiency and smart contract capabilities on the Bitcoin network.
Moreover, Bitcoin’s Lightning Network, a “layer two” payment protocol, enables near-instant, low-cost transactions, making Bitcoin a more serious contender for everyday purchases and micropayments, increasing its potential for further widespread adoption.
According to Metcalfe’s Law, a network’s value is proportional to the square of the number of its users.
With Bitcoin’s user base growing exponentially, from 35 million in 2018 to over 460 million in 2024, and the introduction of Spot Bitcoin ETFs in 2023, its value proposition has gone from a speculative asset to a core financial instrument.
If Willy Woo is right, Bitcoin will dramatically increase in value in the coming years.
Reason #5: The Bitcoin Cycle
What if I told you that I could predict, with uncanny certainty, when Bitcoin would reach new all-time highs and when it would drop like a stone off a cliff.
You’d think I was delusional, right?
But I can. And so can you!
Thanks to the ridiculously predictable timeline of returns that follow each halving date in Bitcoin and provide an annualized pattern of up, up, down, up each and every four years since it was first introduced 16 years ago.
Why do you think Larry Fink, CEO of Blackrock, who used to pan Bitcoin every chance he got, suddenly changed his tune and is now outspoken Bitcoin evangelist?
The answer? His highly paid analysts showed him four consecutive cycles of near to-the-day predictability of what Bitcoin will do at certain times within each four year cycle.
Up in price the year the halving occurs.
Up more the following year with a new all-time high close to the end of that year.
Down dramatically in the third year of the cycle, bottoming out quickly, often losing more than 70% of its value.
Then up again in the last year of the cycle as the recovery gains significant strength.
Will it continue to be that easy?
Maybe, but the ETFs could have an effect that may make the downturns even less. We’ll see come 2026. However, the most compelling reason to invest in Bitcoin is its ability to strengthen and diversify your investment portfolio.
Reason #6: Diversification Benefits in Investment Portfolios
In a world of economic uncertainty, Bitcoin is the ultimate hedge. It’s the One-Stop-Shop of assets, providing diversification, protection, and growth potential all in one.
Studies have shown that adding just a small amount of Bitcoin to a traditional 60/40 stock/bond portfolio can significantly improve risk-adjusted returns.
For example, from April 2017 to April 2024, Bitcoin’s ROI was 4,647% compared to the S&P 500’s 111% in the same timeframe, or Gold at 83%. And you’ll note that includes the year that Bitcoin crashed hard. This demonstrates Bitcoin’s potential to enhance any portfolio’s performance, even in small doses.
Longer term?
Had you invested even just 1% of your portfolio in Bitcoin in 2013, while the S&P 500 gained 218% in that Baker’s dozen of years, your 1% investment in Bitcoin would have grown by 45,261%.
Time IN the market versus TIMING the market works for Bitcoin as well.
So the New Mantra is: Don’t wait to buy Bitcoin. Buy Bitcoin and wait.Or is it?
The evidence is clear that Bitcoin is a force to be reckoned with. The stars have aligned once again for Bitcoin to make a massive move in the coming months. But wait a minute…here’s the other side of that coin – 6 reasons you shouldn’t buy any Bitcoin this year…or maybe ever.
Reason #1: It’s Too Expensive.
Bitcoin is fast becoming the Berkshire Hathaway A shares of cryptocurrency.
It’s been expensive for a while, but this year, it’s surged to record highs – breaking through the $70,000 mark for the first time in its history. Which means that to score just a 100% gain – a relatively small win by crypto standards – Bitcoin would have to go to nearly $150,000 per coin.
And of course that could happen – in fact, as mentioned before, there are plenty of pundits who think it’ll double that number and then some, but still, even a 300% gain is kinda small compared to what some other coins have done in the recent past.
For example Fetch AI (FET), an Ethereum token that powers Fetch.ai, a decentralized machine learning platform for applications such as asset trading, gig economy work, and energy grid optimization, is already up more than 4,000% from its last cycle low.
Which means, there are plenty of better opportunities to make MUCH BIGGER gains in crypto if you know where to look.
Another reason not to buy Bitcoin is its popularity.
Reason #2: It’s Too Mainstream
Everyone and their grandma knows about Bitcoin.
It’s now the cryptocurrency “industry standard” which is why it was the first crypto to garner ETF approval by the SEC.
And while that’s definitely a plus for the crypto market in terms of lending credibility to the cryptocurrency in general, that also means you’ll be competing for profits with millions of other people who ONLY know about Bitcoin. In almost every case of big money making cryptos, once it gets all sorts of publicity, the real millionaires have already been made.
Bitcoin’s been in the news for more than a decade. Seriously hard to make you into the next “crypto gazillionaire” that way, no?
Because it isn’t the only cryptocurrency available, looking into others and finding out which ones besides Bitcoin are doing well is essential.
Reason #3: It Lacks Utility
Updates don’t really matter if they’re never utilized.
What some people call “digital gold” others call an “imaginary coin” because it’s an intangible that only seems to have value because a group of zealous investors say it does.
While Bitcoin is an excellent form of decentralized finance, it doesn’t offer the same kind of widespread usability that other crypto tokens do.
For example, there are cryptos out there right now that are revolutionizing everything from payment processing to real estate, gaming and even recycling. Plus, they’re doing it far more cost effectively than Bitcoin.
The most obvious alternative to Bitcoin (aka an Alt coin) is the “Queen” of cryptos, Ethereum. ETH is a decentralized software platform that enables smart contracts and decentralized applications to be built and run without any downtime, fraud, control, or interference from a third party.
Another popular Alt coin is the native token for the XRP Ledger, created as a payment system by Ripple in 2012. Despite legal troubles here in the US, XRP is used by hundreds of international banks around the globe.
Another prime example is Solana (SOL), a blockchain platform designed to support decentralized applications (dApps). Sometimes referred to as an ‘Ethereum killer,’ Solana performs many more transactions per second than Ethereum. Additionally, it charges lower transaction fees than Ethereum.
Filecoin (FIL) is an alternative to cloud-based file storage.
Audius (AUDIO) is attempting to break down the walls in the music industry.
And the Basic Attention Coin (BAT) is incentivizing switching from Google to a new search engine called Brave, by rewarding its users for looking at advertising on Brave with BAT tokens.
Needless to say, the cryptocurrency marketplace has evolved far from what Satoshi thought it would become and the opportunities for other cryptos to become even more mainstream than Bitcoin is continually growing.
Reason #4: Bitcoin’s Dominance May END This Cycle.
While Bitcoin is still the world’s leading crypto, there’s a real chance it could be dethroned…as soon as next year. I admit that this one is longshot, but it’s still a possibility.
Not only are several cryptos much more useful than Bitcoin but people who actually use and develop applications on the blockchain using crypto are NOT doing it with Bitcoin.
If you’re going to buy cryptocurrencies in this cycle you should be doing research into which ones are the best bets for 1000% jumps in value based on actual usage, NOT because you read somewhere on the internet that this coin or that coin is going to be the “next Bitcoin”.
Reason #5: The Biggest Bitcoin Gains Have Already Been Made
The crypto market in its entirety is worth over $2.63 TRILLION dollars and Bitcoin ALONE makes up for $1.33 trillion of that – more than HALF of the value of ALL cryptocurrencies.
That means that if you wanted to actually profit big from Bitcoin, you should have done it a LONG time ago. The ‘turn $1 into $1 million’ opportunity bus left a long time ago and you weren’t on it. And if you’re standing at the station looking down the road?
Sorry to break it to you but it’s not coming back.
Reason #6: Bitcoin’s Rising Tide Floats All Boats
Despite all of the reasons NOT to buy Bitcoin, it’s still likely to surge much higher and just like has happened in every cycle before this one, the BIGGEST gains are going to come from the tiny cryptos that initially ride Bitcoins coattails and then leave it in the dust on their way to the moon in terms of percentage gains.
Both sides of the cryptocurrency investment argument.
Either way, NOW is the time to position yourself for potentially life-changing gains in the years ahead.
Whether your investment is big or small, don’t miss this once-in-a-generation opportunity.
Full disclosure: Upwards of 60+% of my cryptocurrency portfolio is straight up Bitcoin, and give or take a few percentage points, around 20% is Ethereum, with the remaining 20% made up of various percentages of some 40+ different Alt coins. Truth be told I fully expect that a few of those will blow the doors off the ROI I’ll get from Bitcoin, but at this point, so early in the cycle, it’s a total question mark which ones.
If you want to know what Alt coins I’m investing heavily in, feel free to email me at john.logan@moneytree.ventures.
I teach financial literacy and I’ll tell you what frightens me.
Today, I had a 30 year old tell me that he was comfortable with his retirement plan because he and his wife were on track to have $1.5 million in his investment account and 401(k) when they retire in 35 years. They would be out of debt, with a paid off house and with the kids out of the house their expenses would be dramatically lower than they are today. All that considered and add in Social Security and he thought they would be fine.
Knowing that this particular fellow is not what I would call ‘purposefully frugal’, my response to him was that if he retired tomorrow and he had that $1.5 million today, he would probably run out of money by the time he died even if he only lived to 85. Which, of course, is statistically likely for someone who is 65 today, so chances are pretty good that by the time this young man reaches 65, thirty-five years from now, his life expectancy will be even higher.
Naturally he asked me why I said that. My reply was this:
IF, Social Security is still around in 35 years – and that’s a huge question mark right now – it will be dramatically different. However, we’ll assume it will contribute something to their income. And we’ll come back to that. My bigger concern is that he and his wife are basically ignoring what inflation does to the cost of living.
The stock market is like an ecosystem.
It’s like a forest that is constantly growing and dying. And when one part dies another one pops up. Statistically, the stock market grows at an average of about 9% each year but taxes will eat some of that. Inflation, on the other hand, while it’s still a whopping 8+% this year and the stock market is trying to recover, it averages only about 3% a year over time. Last September’s weather situation of hurricane Ian ravaging Florida and the South Carolina coast lends itself to an appropriate analogy.
Think about what happens to coastal properties when they’re hit by a hurricane. All the dead trees die and are replaced with new growth that is bigger and stronger and more resistant to the next hurricane. The stock market is very similar in that when a bear market hits some industries die and are replaced with entirely new industries. And you can define THAT growth as a measure of true inflation. Not what the government says using the CPI. The price of a stock may go backward temporarily during a bear market – like last year – but eventually the market recovers and prices go back up and pass where they were before the bear market started.
Over time everything is more expensive and some things you’ll be paying for 35 years from now, don’t even exist yet, so if your investments aren’t growing more than what the market is doing then, in effect, you’re falling behind. If someone had told me when I was 30 that before I retire I’d be buying a new phone every couple years for $1000 a pop, I would have told them to stop smoking crack.
Things change.
Think of it another way. If your annual raise or promotion is 5% and inflation is 8% then you just lost 3% of your income. If you’re in business you’re either growing or dying. There is no such thing as maintenance because growth in your market and inflation we’ll eventually eat up every penny of your profits if your growth doesn’t keep pace with the environment around you.
But while inflation isn’t ALWAYS this high, it will still eat up a lot of what your cost of living will be during both your accumulation phase and your retirement and there is no stopping its impact on your wallet.
Consider this. If your investments grow at 9% per year and all-in, Federal, State, Local, property, etc. taxes cost you 3% then your actual growth is only 6%, right? Add in an average of 3% inflation, and that 6% quickly becomes worth – in terms of goods and services you pay for – only 3%. Still, 3% a year added to $1.5 million is $45,000 a year, just about what this fellow makes per year, so naturally he’s thinking “all good”.
Here’s a problem. Even though their home will be paid off, it’s still not an asset. The appreciation on the property can’t be accessed unless they sell it or get another mortgage. And the upkeep and property taxes are a drain on their income so it’s actually a liability. That’s something few people consider.
Here’s another one. Food.
Two people, eating just twice a day, spending just $5 a meal per person TODAY costs $7,300 annually. In 35 years, at just a 3% rate of inflation, the same meal that cost $5 today will cost $13.66. Almost 3 times as much. Add the annual inflation rate to that cost and, assuming they eat every day, and retire 35 years from now, then over just 20 years in retirement, that cost becomes almost $600,000. Make that $10 a meal today and then it becomes $1.14 million over that same period. Throw in a few years like we’ve had recently and that cost will double again by that time.
Will Social Security cover that cost? Maybe. Maybe not. Do you want to bet your life on it?
And then of course, add this. According to a recent report from RBC Wealth Management, the projected lifetime cost of care for someone who is a healthy 65-year-old in 2022, is $404,253 – and that doesn’t factor in long-term care costs, which could be as high as $100,000 a year.
When RBC asked people how much they think they’ll spend on health care at age 65, on average, they said about $2,700 a year. In reality, experts estimate at age 65, today, the annual spend on health care for a healthy couple is close to $5,700 per person ($11,400 for a married couple). That will be likely three or more times that cost by the time our guy and his wife retire in 2057.
And those are out of pocket costs. Medicare, if that still exists, will only cover a certain number of expenses, which means people have to fill that gap. Those costs start to add up quickly as we age.
The bottom line is to plan for about three times more than you think you’ll need today, because rising costs even without rising taxes and bear markets factored in will eat a major chunk of your savings down the road.
