Tuesday, May 21, 2024

Retiring On a Crypto Portfolio a Realistic Super Charged Option

Most people who plan for retirement rely on a pension, or a 401(k), plus some investments in stocks and bonds. A financial advisor would consider this a traditional portfolio that, theoretically speaking, would make a husband and wife team financially secure in their golden years. 

But more recently, with spiking inflation and rising prices on everyday goods, retired persons are finding that making ends meet is harder than ever. Some are even considering going back into the workforce. 

Others are applying for reverse mortgages at record rates. If you’re 62, and have owned your own home for years, you can tap into all that equity you’ve built up by applying for this special variety of home loan. If approved, you can potentially realize proceeds in the hundreds of thousands of dollars. You can receive your funds in a one lump sum payment or you can opt for equal monthly disbursements. 

What’s more, you never need repay your reverse mortgage unless you leave the home, or you die. If you’re wondering about the specific nuts and bolt behind how a reverse mortgage works you can click on this link: https://reverse.mortgage/how-does-it-work

But what if you haven’t saved enough for retirement? Or what if you haven’t owned your home for very long or you’ve lived in an apartment for all your working life? Is there another way to begin building up a retirement portfolio that could result in more rapid returns than a traditional 401(k)? 

According to a new report by the Motely Food, regardless of its volatility, the recent bear market, and even the bankruptcy of the once popular crypto exchange FTX, cryptocurrencies like Bitcoin (BTC) remain one of the most attractive and popular investment options available to investors looking forward to security in retirement. 

Crypto is especially appealing for middle-aged folks who wish to realize rapid and lucrative returns than they would otherwise realize in the traditional stock market or a savings account.     But preparing for your retirement is never easy. However, if you choose the right investments with the help of a certified financial planner, you can “supercharge your savings,” or so says the Motley Fool. 

The reality of crypto is this: it was one of the most sought out investments of 2021. Most cryptos have realized plummeting prices this year, which doesn’t spell doom. If anything, it creates an opportunity to buy at relatively low prices. When the prices rebound in a year or two, you will conceivably 10X your initial investment.  

While some question the overall safety of crypto since it’s the new kid on the block, so to speak, many investors have become millionaires almost overnight. With that in mind, is it possible to retire almost exclusively on cryptocurrencies like BTC? 

Here are some things to ponder when searching for an answer to that very question.

Crypto’s Big Risk

When purchasing crypto you need to keep in mind that it is a speculative investment. No one can tell you with absolute certainty that it will be around for one hundred years. Even the most stable of cryptos like BTC are not 100 percent guaranteed to last forever. But then, what is? 

This qualifies it as a high-risk retirement investment. In other words, if all your savings are dedicated to one crypto and it fails, you risk losing your entire retire nest egg. If you don’t have a whole lot of time left prior to retirement, you stand the chance of not getting your savings back.  

It’s a best practice therefore to not put all your savings into a single crypto basket but instead diversify your portfolio, so that if one investment fails the others can pick up the slack. 

How to Go About Safely Investing in Crypto

The Motely Fool states that while retiring exclusively on crypto probably isn’t realistic, there are very safe ways to add it to your overall savings portfolio. Here’s how:

–Make a check on your diversification: Financial experts agree that a properly diversified retirement portfolio contains at least 25 different stocks, bonds, and cryptos from numerous industries, some high risk, others medium risk, still others, low risk. This strategy mitigates overall risk because if one or two investments fail, your portfolio won’t completely collapse.      

–Invest only what you can afford to lose: Since crypto is so speculative, you need to invest only an amount of money you can afford to lose. This doesn’t mean you are likely going to lose all your money. It’s just a good precautionary practice when it comes to protecting the cash you will need in retirement. 

–Research the cryptos you wish to buy: Don’t go on YouTube and listen to all the hype about a crypto that’s said to 100X in just a few weeks. These things almost never work out. Right now, there is very little regulation in the crypto industry and all too often, innocent people get scammed. 

You can easily go online and find some talking head spouting off about a crypto that will make you a millionaire overnight. More often than not, the talking head is a shill for a crypto that is likely a scam. Like the Motely Fool says, if a crypto investment seems like it’s too good to be true, it probably is. 

So then, what’s the best way to purchase a relatively safe crypto like BTC for your retirement portfolio? Dollar Cost Average (DCA) a little bit every day, or every week. Eventually, you will build up a solid, lucrative portfolio that is able to withstand the ups and downs in price. 

Also, when prices are high, it doesn’t hurt to skim some cash profits off the top. Like the old saying goes, no one ever went broke taking profits. 

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