The Crossover Point

Zola.

Congrats @Hopingforthesimplelife ! I am looking forward to this milestone.

I hope that what I am about to type next makes some sense, but until you go down the Bitcoin rabbit hole and really understand what Bitcoin is and what it can do, I might sound like a crazy person...

On crypto, I have to say upfront that the vast majority of crypto is a scam. People flock to "alt coins" as they think they missed the boat on Bitcoin, but most of these are terrible copycats, which don't add any value.

However, Bitcoin is not. It is a pristine asset. It is still in price discovery mode (released in 2009 after all), and it is becoming much more globally accepted around the world by the world's biggest banks, to countries like El Salvador making it legal tender. It is highly volatile still, but if you look at it on a logarithmic scale since inception it crashes to higher lows. Since 2009 its average return is 177% a year. 

Countries with many unbanked citizens are flocking to bitcoin, as it allows anyone to send bitcoin to their phone instantly for near-zero fees, which can be converted into fiat currency if desired.. Many foreign workers get exploited by companies like Western Union when trying to send money home to families in poorer countries, sometimes losing 20% of their paycheque on a transaction. Bitcoin solves problems like this. 

There will only ever be 21 million bitcoin, 18m has been mined and there is a circulating supply of 2 million. It is being gobbled up at a frightening rate.  My personal opinion is that it is riskier to not have any position, given its asymmetric return vs risk. Because it is open-source, thousands have tried to copy it, but all have failed to get anywhere close to its power, security and acceptance. Bitcoin is the strongest computer network ever created and it gets stronger and more secure every day that it is operating. 

Gold has been a pristine store of value for thousands of years. The relative scarcity is what made it so precious. Paper money used to be backed by gold, but now it is not. War is usually the reason for this. We don't have to be a financial expert to know that all this mass global money printing and debt cannot have a happy ending. 

Bitcoin is better than gold for many reasons - truly scarce, easily divisible (a bitcoin can be split into 100m 'satoshis', easily transportable, true sovereignty (you hold the keys to the coin), and backed by the strongest computing security ever created. 

People simply do not understand what Bitcoin is as it's such a new concept, a bit like the internet back in the extreme early days. 




The internet has never had a native currency. Bitcoin has the potential to become this, a one-world / new global reserve currency, which is quite crazy...  Jack Dorsey the Twitter CEO is working on making bitcoin payments direct on Twitter served by the layer two application Lightning (which sits on bitcoin, allowing global scalability). There's thousands of people around the world working on developing bitcoin further. Gradually, then suddenly as they say.

I would highly recommend books like "Layered Money", "The Bitcoin Standard", or start with the "What Bitcoin Did" podcast ran by Peter McCormack, there is a full series that explains everything. There is simply too much to put into a post, it takes many hours to fully get it. But once you do it really opens your mind!

Hopingforthesimplelife

Had a read, think I’ll need to have another! Many thanks for the detail and thoughts.

What % of your portfolio (shares and cash) is Bitcoin?

Zola.

Around 5% @Hopingforthesimplelife.

I am pound cost averaging in a bit each month. I only started this in early March after a lot of research and a larger lump-sum purchase. I plan to invest smaller amounts each month over the next year or two, then forget about it and see what happens after that. 

Grogged

Now that PP supports crypto, I've invested (or at least bought) £20 in Ethereum using some of my survey money. I may do the same next month, but with Bitcoin.
Toe dipped! 😁

Grogged

Now that PP supports crypto, I've invested (or at least bought) £20 in Ethereum using some of my survey money. I may do the same next month, but with Bitcoin.
Toe dipped! 😁

Zola.

Grogged said:

Now that PP supports crypto, I've invested (or at least bought) £20 in Ethereum using some of my survey money. I may do the same next month, but with Bitcoin.
Toe dipped! 😁

Nice one @Grogged! It's an interesting thing to follow. It feels like the new financial industry is being built right in front of us now.

Ethereum is pretty popular and is growing, but Bitcoin is my only crypto investment. Bitcoin is the only truly decentralised crypto that I know of. 

Zola.

And just like that, summer is over. It's gotten rather dark in the evenings all of a sudden. It will soon be time to put the order in for stove logs..! 

Nothing too much to report this month, work is going ok, investments are kinda maintaining sideways. My wife is getting rather uncomfortable with the bump, we are only about 80 days away from the due date now. My son is very excited about it all, but he'll be in for a shock when 100% of the attention can't be on him anymore.. !

September update:

S&S ISAs vs Mortgage Debt: 69.00% (+1.28%)  

Investments & Cash Vs Mortgage Debt: 92.21% (+2.55%) 

Combined Gap to Mortgage Neutral: £7,426  (-£2,497)


It's also pretty much a year exactly since I started tracking the three metrics above, below is where I was this time last year!  I did get a £25k inheritance from a relative which greatly helped, but it's very motivating to see the progress still. 

S&S ISAs vs Mortgage Debt: 31.5%
S&S ISAs + Cash vs Mortgage Debt: 40.37%
Combined Gap: £61,376

Zola.

Mid-October already   

I got my bike fixed and started to cycle into work a few times over the past couple of weeks, that's been a nice change from sitting in the house continuously.. I think I have another month of it before it will get too dark and wet.

The duchess has another month of work then will be off for maternity as we wait for baby #2. We went through some budget plans yesterday and will really try to maintain the mortgage overpayments and most investments as normal, by tweaking a few things, like taking our boy out of nursery for a couple of days each week to be at home and focusing on improving grocery spending, etc. I don't imagine we can avoid the current account being depleted though!!

The markets are a bit jittery and haven't really moved the needle this month. However, my allocation in bitcoin has been on a tear and is up 30% since last month and is getting into all-time high territories now. 

I am finding it hard to believe that I am almost at the mortgage neutral stage now, maybe, just maybe it will be achievable (at least temporarily) by the end of 2021...


October update:

S&S ISAs vs Mortgage Debt: 69.58% (+0.58%)  

All Investments & Cash Vs Mortgage Debt: 96.37% (+4.16%)  

Combined Gap to Mortgage Neutral: £3,430  (-£3,996)

Grogged

Being close to mortgage neutral is a fantastic achievement.
Sounds like you have a solid plan for maternity leave.
If I had to cycle to our nearest office I'd probably get there in time for a cuppa and then head back home! 😆
It has been a weird time in the markets hasn't it, slated to continue till the new year.
Congrats on the bitcoin.
My £40 is up £5...

Zola.

Grogged said:

Being close to mortgage neutral is a fantastic achievement.
Sounds like you have a solid plan for maternity leave.
If I had to cycle to our nearest office I'd probably get there in time for a cuppa and then head back home! 😆
It has been a weird time in the markets hasn't it, slated to continue till the new year.
Congrats on the bitcoin.
My £40 is up £5...

Thanks @Grogged

The office is only a few miles away, so it's not too bad.
The markets are definitely feeling a little bit fragile with the supply chain issues and this Evergrande situation in China...  if there is a large drop we will get cheaper units for a sunnier time at least, although it's never too enjoyable in the moment.