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A Case For Buying More Bitcoin — A Letter To Ruby Having seen $1.5k grow to $100k, it’s time to double down and invest in my daughter’s financial future with conviction.
Originally posted on that explains how the United States Federal Reserve has been “debasing” the USD.In March 2020, the Fed created $2.9 trillion in new money, and Parker predicts that this will happen again.He goes on to explain why bitcoin is exciting.
What’s next?
So, if I were to simply save GBP in the bank until it was time to pass it to you, your inheritance would have lost huge amounts of value in real terms: somewhere between 2% and 12% per year, according to our data.
What does this mean? 12.3 Related 3.Investment History
For 10 years, I’ve been working to preserve our wealth prudently for you, investing across different asset classes with a number of services.
Property
I made three real property investments: one is the house in which we now live, and the others are apartments.I leveraged the buy-to-let mortgage market, renovated one flat, and had tenants rent when possible.
Public Markets
I used wealth managers Ruffer and Tribe to invest in public markets, giving me exposure to financial products such as commodities, currencies, debt, equities, and funds.
Private Equity Angel
I joined an angel investment syndicate, Green Angel Syndicate , to invest in cleantech startups.
I deployed a small amount of capital into multiple high-growth, high-potential technology companies.
I am happy to say that I’ve made more good decisions than bad, in that I’ve not lost all our money, but it has not all been smooth sailing.4.Investment Problems
Investing is not easy, and I came across a number of problems:
Property Management is expensive.
Rental agents charge 12% of each year’s rent to manage a tenancy, and unexpected operating expenses and vacancies happen, so yields are inconsistent.It is illiquid, with high transaction costs.
They are not easy to buy or sell, and even when you can, there are very high transaction costs (approximately 10%–20% of the asset value can be lost to agents, lawyers, and taxes).Strong regulations.
For example, the UK government now asks for 6 months’ notice to end a tenancy, so to sell your asset, you now have to wait out that period.
Public Markets Poor transparency of investment.Once annually, you are given a portfolio report by your wealth manager that includes a complex dataset on how your GBP was invested, which is hard to decipher.Misaligned fee structure.You have to pay an annual management fee of approximately 1%, regardless of performance, so there is no recompense for poor performance.
Strong regulations.For example, certain assets can only be accessed by regulated entities, meaning that you have to use a wealth manager rather than invest personally.
Private Equity Angel Illiquid.It is only possible to make a positive return after the startup has a liquidity event, such as an acquisition or IPO.Long-term.Because of the amount of time required to build a profitable business, it is unlikely that you will get a return before 10 years, if not longer.
High-risk.Investing into pre-revenue or pre-profitable businesses is by nature very risky, with a high chance that your investment will fail, and in that case, you receive no returns at all.
Remember: the objective of all this investing is to store value over time, which because of inflation rates means your investments need to gain more than 12% per year.
Akshay BD nicely summarizes the situation into which I have been forced: 5.Dad’s Bitcoin History
It’s about time we talk about Bitcoin.In December 2015, thanks to the influence of my friend Dan Burke , I purchased 13 bitcoin at approximately $450 per coin.
Frankly, it was a gamble on an interesting new technology about which I knew very little.
Over time, I sold off 75%: October 2016 — to pay for a trip to Japan with your mum May 2017 —to pay for travels in South America with your mum July 2017 — out of fear that the Bitcoin Cash hard fork would negatively affect the price Screenshot showing the dates and prices of my bitcoin trades
The story you will likely find most amusing is of when I used my Bitcoin Cash to buy a 1980’s Mercedes SL350 from a rapper called “ Black the Ripper .” I didn’t want the coins after the hard fork, so while browsing eBay in January 2018, I found a car advertisement stating that the owner was “willing to exchange for crypto.”
The car broke down on day 1, used to leak on your mum’s side, and was a nightmare for the 2 months we owned it.
At the time of writing, we still own 3 bitcoin, each valued at $31k.
(Editors note: bitcoin is now worth more than $60,000.) Screenshot of bitcoin portfolio performance, 2015–present
The value of each bitcoin has gone up almost 7000%, or 70✕, in just 5 years.
These gains can be attributed partially to the inflation problem we’ve discussed, but also to the newfound demand for bitcoin as the technology matures.
Without a doubt, bitcoin is the best performing asset I have ever owned, and this experience has laid the foundation for my conviction in its future.6.What Is Bitcoin?
I’ve just finished reading two excellent books, both of which were written since my first bitcoin purchase in 2015 and are representative of the number of intelligent people who have since been drawn into the space:.
