In order to build wealth you need assets – bitcoin is a good start

As an analyst with a background in economics and a keen observer of global financial trends, I strongly believe that most people are living paycheck to paycheck and have little understanding of the economic realities around them. The purchasing power of their currencies is being eroded year after year, and saving money in a bank or savings account is not the solution.

A large number of individuals barely make ends meet or save whatever remains, keeping it in the bank. However, this approach won’t suffice for wealth accumulation. Instead, consider acquiring assets, and investing in Bitcoin could be an effective starting point.

Most people have no idea what is going on with the economy

If you’re among the 90%-plus individuals barely making ends meet and living paycheck to paycheck without saving for emergencies, it’s highly uncertain that you’ll weather the upcoming years unscathed. In fact, you may end up with significantly fewer resources than you currently possess.

In simple terms, most people in Western nations are unaware of the workings of their economy and blindly assume that economic conditions will remain the same, with no choice but to cut back on expenses as costs rise and salaries fail to keep pace.

Save your money?

Some individuals may be preparing for potential difficulties ahead, aware that something isn’t right but unsure of the exact cause. In an attempt to safeguard themselves from an anticipated crisis, they are accumulating funds in savings or a bank account.

Instead of just saving, which is commendable as encouraged by SEC Chairman Gary Gensler, people are making a mistake by keeping their savings in the bank or savings account. The reason being, based on official data, the value of their currency is losing around 3% to 5% of its purchasing power annually, depending on their location.

At Shadowstats.com, economic analyst John Williams employs the same Consumer Price Index (CPI) methods used by the US government during the 1990s and early 1980s. However, due to rising inflation over the years, these baskets of goods and services have been adjusted by various administrations. They’ve swapped out items that contribute more to price increases with those that result in smaller increases.

As an analyst, I’d rephrase it as follows: In the 1990 economic model, inflation stands at approximately 7.8%, whereas the US government’s 1980 model puts it closer to 12%. However, considering the massive currency printing that has transpired since then, leading to a significant decrease in purchasing power, and the meager interest rates of around 0.03% offered by banks on savings, this situation appears to be unfavorable at best. In fact, it’s almost comical when you consider the subpar services and products often provided by these financial institutions.

The wealthy hold assets

As a researcher studying the financial habits of the affluent, I’ve discovered that they tend to prefer investing in assets over keeping large sums of cash in the bank. Their wealth-building strategy involves acquiring properties, stocks and bonds, precious metals, art, or any other valuable possessions.

When governments increase interest rates due to economic overheating resulting from past lax policies, leading to a slowdown and decline, common workers often lose their jobs. In an attempt to prevent economic collapse, governments may print more currency, but it’s the very people without significant assets who bear the burden.

Which assets to buy?

From an analytical perspective, I’d put it this way: With each addition of new currency units into the system, there’s an increase in potential buyers vying for a limited pool of assets. Consequently, the demand for these assets escalates, leading to a hike in their prices.

As a crypto investor, I understand that not everyone has the financial means to invest in traditional assets like real estate, stocks, bonds, gold, or artwork. The costs of these investments can be quite high and out of reach for the average person. Even bitcoin, which was once considered an accessible alternative investment, has seen its price soar to new heights, making it a less viable option for those with limited resources.

Investing in stocks, bonds, and other financial instruments necessitates expertise to avoid potential losses. On the other hand, purchasing bitcoin comes with a user-friendly experience. Setting up an account on platforms like Coinbase and linking your bank account is a straightforward process.

As an analyst, I would put it this way: With Bitcoins being divisible down to the smallest unit called Satoshis, purchasing a modest amount, say $20, $50, or $100 at a time, is an effortless process.

As a cautious crypto investor, I would advise against attempting to time the market by selling and then buying back in at lower prices if you’re not a professional trader. The volatility of Bitcoin can lead to significant price swings of 10% or more in a short period. However, keep in mind that over the long term, this young and rapidly evolving asset has shown consistent growth.

Why Bitcoin?

As a researcher studying the cryptocurrency landscape, I’ve come across an intriguing aspect of Bitcoin’s behavior. Being a decentralized currency, it’s not subject to manipulation by governments or financial institutions. Consequently, its price cycles have historically lasted roughly four years. Currently, we’re in a bear market phase which could persist for anywhere between 12 to 27 months. The remaining period is typically marked by bull markets.

For approximately 16 years, Bitcoin has experienced exponential growth, surging over 2 million percent in value. Compared to all other assets, its increase in worth exceeds 99%. Absent a global ban on Bitcoin mining, for instance, it is anticipated to continue rising in price.

In simpler terms, the general public might view Bitcoin as an option for long-term savings. However, it’s important to keep in mind that Bitcoin, like any investment, carries risk and can experience both gains and losses. It is therefore not a guaranteed or risk-free way to save money.

Self-education is key

The key recommendation is for you to conduct thorough research on Bitcoin. This process frequently results in gaining insight into the shortcomings of our traditional monetary system. Furthermore, it may not be beneficial to seek advice from financial advisors, as they are deeply ingrained in the current system and have no motivation to suggest alternatives like Bitcoin that operate outside of it.

Stay secure! Use only legitimate platforms for handling your cryptocurrency transactions, and always guard against potential scams to protect your account. Enjoy your Bitcoin investments!

2024-05-14 14:14