Last night there was "freezing rain", where it rains water, but it freezes on contact, leaving a coating of ice on whatever it touches. These pictures are from the rental car, which is relatively basic and doesn't have heated wing mirrors. Heated mirrors sound like a luxury, but in Finland and even though this kind of rain is relatively rare, I consider them a necessity, as while the car can be warmed and the windows painstakingly scraped, the wing mirrors can't be, reducing visibility while driving a lot. It made it very obvious how often I actually use the wing mirrors, when I can't.
Upon arriving at work, I had an interesting conversation with a colleague who has been increasingly interested in investing into crypto. Even though I have spoken to him directly for two years and has been on the periphery of conversations with other colleagues a lot in the last few months, he is yet to make a move in. What he has realized however is the reason he hasn't is something that I have encouraged him to do since the start, *put some skin in the game.
In my opinion, it is a necessity.
What he recognized is that while he was starting to do his research into the pros and cons of crypto and the potential to invest, he couldn't "trust" the information because the people who were positive owned, the people who were negative, didn't. This creates a natural sunk cost or no skin in the game problem, where people were talking from their own position and that was not necessarily objective, yet each thought their opinion was correct.
What he needed to do, was set conditions so that he could make up his own opinion, which requires buying some crypto in order to get some experience. Not only does buying give a new position, it also puts that all important skin in the game that engages the mind and emotion, as the chance for gain and loss, as well as the sense of ownership starts to set in.
While he asked me what he should do in regards to buying, I said I can help him, but I do not give advice or taken responsibility for gain or loss - this has to be an opt-in position, I am not his or anyone else's guru. Of course, I told him the, don't invest what you aren't willing to lose completely speech, but I also added that make it enough that you will be annoyed if you lost it, as it creates an edge that draws attention.
As I pointed out, the other colleagues who are talking about this all of the time are only doing so, because they bought in. Once they had some skin in the game, once they had the potential to win and lose, they became interested. For most people, while theory can engage the mind for a short time, practical application happens when thoughts, become conversations and actions. It is possible to think about a topic, believing one knows a lot, but when a new action is made, new thoughts arise that prove that there is more to learn.
This is part of the Dunning-Krueger in action, as while an amateur can feel very confident in their knowledge and abilities, a professional knows their limits and recognizes that there is far more to learn. This is why, "the more I learn, the less I know" is true. It isn't a conflict of understanding, it is the opening of awareness to understand that the unknown potential, the uncertainty, is greater than the known. Every solution leads to 100 new problems.
As I have said, building an investment mindset isn't done only through investing, it requires a far greater development of a host of aspects, including being able to recognize and have strategies for handling emotional influence and reaction. This is far easier to identify with a little skin in the game, as the pain of lessons is felt viscerally, not just imaginatively.
As said, in my own opinion, investing isn't a luxury, it is a necessity. While we can talk about the financial availability factors that influence the ability to invest, the crux of the matter is every activity requires an investment of some sort, whether time, money, or energy. I believe that in many cases, it is like my wing mirrors, I do not have access to their reflective capabilities unless I can look into them and recognize my surroundings. Once there is visibility, opportunities to move open up and getting a little skin in the game raises questions and motivates us to search for the answers, not just what we think we know.
Taraz
[ Gen1: Hive ]
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This is was a brilliant piece!
Precisely! The significance of the emotional factors cannot be over-emphasized. What you plan to do or imagine you will do may be something entirely different from what you will do once you're in the fray.
There is no shortcut to building the mindset. You have to just do it.
Most people do not have the mentality for making independent choices. They follow the beaten path and avoid the chance of loss to an irrational degree. Your colleague is an interesting case. It sounds like he wants you to tell him what to do so as to be able to avoid self-blame if things go sour.
Yet people "feel" that they are are imagining it well. I guess with a wide range of experience it is possible to imagine well, but these days, that is quite rare, especially for the younger folk. Everoyne says "if I were rich" as if they know what they would do...
He s cautious and he is quite stoic in some respects - but this is new territory for him, even though he has already investments in other areas.
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Exactly.
I imagine coming into serious money could easily make one lose sleep for a few nights. The implications are far-reaching.
For starters, who would you tell? And even if you didn't tell anybody, if the origin of your wealth were capital gains (or earned income), they would be public knowledge in Finland, Sweden and Norway. In Finland, the Tax Administration sends a list containing everyone who earned at least €100,000 in the previous tax year to the press by the November 1. And anyone's earned income or capital gains can be found out by anyone by using a terminal at the local tax office.
Sweden has Taxeringskalender that contains everyone's information.
In Norway, everyone's tax information is searchable from the Norwegian Tax Administration website. It requires logging in using strong identification and a list is maintained of those who query other people's information.
I wonder when the practice of publishing everyone's tax information will be discontinued owing to it being a massive privacy violation and causing security risks.
At least some Finnish Bitcoin OGs whose names are known in the scene have relocated to Switzerland. A smart move indeed.
Have you given him pointers to study materials on Bitcoin? Andreas Antonopoulus, Anthony Pompliano, Mike Novogratz, Raoul Pal and Michael Sailer come to mind as people worth listening to about the topic. The cross-asset stock-to-flow model? Mayer Multiple? Have you talked about things like that?
I don't understand how it is legal now. I have always found it weird here. I have also found it weird how we give our SS number to every man and his dog :)
I have talked to and shown the stock to flow, but not much else. He has been in discussions with us (other investors) and asked questions from them too. I find it interesting how poeple interact around the discussion of investing and money.
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I think it's a remnant from a much more naive era when the Internet did not exist.
Sending that information to the vultures i.e. the yellow press is over the top.
This whole thing has been brainlessly aped from Sweden, I guess.
That would be ok if our SS numbers weren't used as passwords. That they are is completely beyond me.
Show him this:
https://digitalik.net/btc/
and tell him to check out all the links. The names I mentioned create very good material on social media.
Raoul Pal owns a company called Real Vision Finance whose YouTube channel is a treasure trove of macroeconomic knowledge.
https://www.youtube.com/channel/UCBH5VZE_Y4F3CMcPIzPEB5A
Thanks for the links. Will pass them on. I think it is valuable to have some content that another Finn finds useful. :) Sometimes I think that part of the issue is that it is hard to trust someone like me about these kinds of things - especially when many still assume I am uneducated :D
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Glad to be of help. :)
I personally hate the phrase "only invest what you can afford to lose", because those that need to invest the most can't really "afford" to lose any of it. Every loss hits them hard.
I think talking about it as discretionary income, or investing what you might spend on entertainment or things that aren't necessities is better. Of course, that may be a slightly longer conversation, and to many it may be the same thing, but it's worth the effort.
Many have not gotten into crypto, and didn't years ago, because they didn't feel like they could afford to lose even a few bucks.
I think it's worth investing even a few bucks though, even if there isn't as much stress or annoyance. Especially when starting out. You need to get a feel for the markets and get used to the ups and downs. Even after years that can be hard. It will be tremendously hard if someone's first investment is $1000 and the idiot buys Bitcoin at the peak. They might just sell it right away and then find out a few years later that after their lose of a ton of money, it actually doubled from where it was.
I wrote a post maybe a month back mentioning this. If a person is in a bad situation, they are going to have to take risks to get out of it - "saving" isn't going to cut it. For someone like I am talking to here, this isn't the case.
This is a longer conversation, but one I do have with these people too. For me personally, there has been very little extra without taking it away from somewhere else - entertainment I paid for got largely cut, entertainment that paid got added - Hive is my hobby and my vice of choice.
I find it interesting how people feel this way, while spend on non-returning activities daily that are a guaranteed loss. It is a perception of value in the valueless. Yes - there are some activities that could and perhaps should just be done for the fun - but "greed knows no bounds" applies to our pleasure seeking behaviors most of all.
This is an important lesson.
Good to see you back around the place.
I don't think entertainment is really a waste of money, it's just that you have to consider more carefully where you spend sometimes. Often I hear very classist rhetoric about poor people buying an Xbox or iPhone. Are these necessities? No, but they are very important investments for the person, not in their financial future, but their happiness. $1000 for two years of greater happiness isn't that much. Compare that with a night out of drinks or a concert and you realize which is more expensive.
I think the greater issue is that many are devoid of both happiness and money. Despite the old phrase, there is a very clear link between the two in modern society. If they were the happy dirt farmers told of in tales by the rich, then they wouldn't feel the need to buy things they supposedly don't need to have a more enjoyable life.
It's of course a lot better in certain countries than others.
But sometimes you have to make the trade of some happiness in one form for greater security and happiness in the future.
It depends on how much time is spent. I think there is a law of diminishing returns and it may become a heavy cost. Time spent in one place, can't be used in another. I think the problem with entertainment is that it is very easy to "over-invest" into it.
I think this is what a lot don't consider. The happiness now can lead to a lot of suffering later. The memory of fine chocolate doesn't satisfy an empty stomach.
I think for people like your friend the best way to enter into the crypto is hive with zero financial investment. Here one can mine crypto with their time and content. This would allow him to learn as much as he can and hopefully someday decide to invest his fiat.
I think the crypto industry is one of the easiest industries/markets to enter. The barriers to entry are little and many don't understand this. It might not be the case for a long time.
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Not really. This is only the case if a person has no disposable income or a high degree of loss aversion. For the people who do have income to spare, the rate of gain would be too slow to motivate. Investing a little in here and then seeing what is going on speeds the process and can supercharge the experience.
Yes it is, but because it goes against the rain of conditioning, it has other hurdles than financial.
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I share your opinion @tarazkp is a must
Cryptography is growing day by day and they have been doing it for several years, those who knew how to take advantage of the opportunity, today are very well economically, which we could not invest due to lack of money, we are happy for those who invested and are doing well, however Those who did not invest as exeptics are clutching their heads today.
In this type of business you have to be risky and put on a little skin, as you say, knowing that your investment is at risk, but there is a high degree that you can make your investment grow, and above all, not make purchases or Impulse sales, let alone invest the money that you cannot afford to lose
I take this opportunity to wish you a great day
If you aren't willing to put some skin in the game, you can't complain when others who make gains. So many say "you should have told me" even though they were told multiple times :)
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I experienced a similar situation with my eldest son, I had suggested that he buy Bitcoin when it was worth $ 480, but he did not listen to me, a few days ago he saw that the value exceeded $ 50,000, now he is desperate that he wants to buy
You'll have to update us on how he goes and what his first coin is. The fact he is taking his time and researching he might have something really valuable to teach others.
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I have learned a lot over the last couple years from talking to people IRl, as well as from their progression once htey have bought in. Lots of lessons.
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Yeah that's the best way to learn, Bitcoin is nice but I think it's too high to 10x I've made a bucket off $360 I would only have made a few cents on BTC at current
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Wow, looks like you got a good coating there! We get freezing rain pretty frequently here, but a couple of years ago I came across a new one. Freezing fog. It was pretty nuts. It wasn't raining or anything, but as you drove through the fog the ice would start to collect all over your vehicle. It was probably one of the scariest drives I have ever had to make. For me I think investing is more of a luxury. Especially when it comes to the crypto side of things.
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Freezing fog sounds terrible. I am guessing the roads were slippery AF. I am glad here there are studded or friction tires i the winter.
Have you ever bought some crypto with your "own" money?
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Oh yes, I have spent a ton of my regular money on crypto. Probably more than I should have at this point! It feels that way a lot of times anyway!
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which means you know the feelings of the ups and the downs - it is different for the people who have earned it through activity only. I tihnk that part of the reason you have made it, is you bought in, as many who didn't find it easy to leave and miss the bigger picture.
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Yeah, you are probably right. I bought a lot of that old token that begat this one. I mean obviously not enough to make me a whale, but enough at a much higher price that my account is where it is today.
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to tell the truth not a lot of people like to invest or they just don't want to get into some complicated mathematician and prefer bank low but the sure interest I too did it before I know of crypto or can say I didn't know I can do more with my money
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Most people don't invest into anything directly, the direct investor is not the average person.
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Good morning. I enjoyed your post, your message is clear and concise.
Totally agree, you have to have some skin in the game , if you don’t, there’s no motivation to learn more. Once you buy in your interest level goes up along with your understanding of how crypto works.
Once you see the earning potential most of us become thirsty for more knowledge. The more you know the more you invest.
I am just glad my old brain is starting to get it. What a ride it’s been 😎
I drove thru several hundred miles of that freezing shit last week in the 100 year freak ice storm. LA. & TX. (USA) Freak for it to be so far south, temps so low and a week long, 3 storm systems back to back.
Wing Mirrors...
Yes they are heated, that is what they looked like when I woke up B4 flipping the switch.
Deadly bridges and underpass ice skate rinks every one of them. I shut down for over 48 hours to let it pass. Brutal stuff. I try to avoid it, but can not always do so...
And I also read and learn from the crypto info you put forth in your writings. Cheers :-)