Would the Richest Man of All Time Buy Cryptocurrency?
"Wealth from get-rich-quick schemes quickly disappears; wealth from hard work grows over time." (Proverbs 13:11, NLT)
Imagine if Jeff Bezos, the CEO of Amazon and currently the richest man in the world, gave you investment advice. Would you take it? Many people would listen to his advice because they would presume that the wealthiest man in the world must know a little bit about good investments. After all, he is the wealthiest man in the world.
About three-thousand years ago, the richest man in the world was King Solomon. Some say that he was the wealthiest man of all time, although he did not aspire to be wealthy. History knows King Solomon best as a prophet of God who was the wisest man of all time. The scriptures of the Old Testament tell us that one night after making an offering to God, God came to Solomon in a dream. God asked, "What do you want? Ask, and I will give it to you" (1 Kings 3:5, NLT).
Imagine if God came to you and said he would give you anything, what would you ask for; wealth, long life, world peace? We know now from His interaction with Solomon that God admires humility in His people. Solomon summed his request up to God by replying, "Give me an understanding heart so that I can govern your people well and know the difference between right and wrong" (1 Kings 3:9, NLT).
God said many things to Solomon that night. However, in His direct response to Solomon's request He said, "Because you have asked for wisdom in governing my people with justice and have not asked for a long life or wealth or the death of your enemies I will give you what you asked for!" (1 Kings 3:11-12, NLT). God was so pleased with Solomon's humility that he went on to give Solomon wisdom, wealth and long life.
So, let's get back to the original question. Let's bring this issue back to the time of King Solomon. Imagine that you were a merchant about three thousand years ago. A man that was wealthier than Jeff Bezos of today and a prophet of God gives you advice on investing. "Wealth from get-rich-quick schemes quickly disappears; wealth from hard work grows over time. (Proverbs 13:11)." Would that change your life? What would you do?
Would you buy cryptocurrency? Would you invest in risky investments? Would you gamble with all your paychecks? Alternatively, would you spend conservatively and depend upon the profits from your labor to add up over time for your future?
A Lesson Learned
From time to time, I try to gain personal experience with an investment, so I can better educate readers like you on the investing process. I feel if I have owned the investment I am writing about, I can relate my experience and let the reader make his or her own decision on what I've shared. I have had so many people ask me about cryptocurrency that I wanted to learn more about the currency myself so that I could give an educated opinion.
First, some background about cryptocurrency. When people hear how some cryptocurrency owners have made huge profits, they think that maybe they could make big profits, too. Just as you will hear with any investment, the past performance is no indicator of future results. Cryptocurrency has no indicators for growth or loss other than bad news. If a country states that they are going to regulate cryptocurrency more, then the currency goes lower in price. Maybe there will be an overreaction, and there is a chance to generate some profit if you are lucky enough to catch the bottom of the price move. Additionally, if there is news about a cryptocurrency computer hack or a substantial buyer is buying into or selling their coins, the market will move. There is no way to predict any market direction with this information. For the long-term, no economic indicator shows it will grow. Many cryptocurrencies will have a limited number of coins or units that will be released to the public. Limiting the market of an investment, at some point, may affect the price. However, limiting the market has not benefited many cryptocurrencies, if any.
Now, here is my opinion and experience. Last December, I decided to make a small purchase of cryptocurrency, so I could better understand how the market worked and the process of purchasing the investment. On December 21, 2017, I made two purchases of a cryptocurrency which I will leave unnamed. I paid a reasonable trading fee of $2.99 on each trade and I was able to make the transaction from my bank account easily. It was an experiment, so I only invested $200. After the trading fees, the net investment value was $194.02. Today on December 4, 2018, the value of the account is $20.17. My total return has been -89.60%. Could it go up in the future? Perhaps it could, but I am not going to hold my breath. I would have liked to have a profit, although I do accept the result because it was an experiment. I will probably not sell it because it gives me a story to tell when someone asks me about cryptocurrency.
The Moral of the Story
These are not the specific words of King Solomon. However, here is some simple advice that I think follows the gist of King Solomon's Proverb for investors today. Live within your means. Save as much as you can. Give regularly to your Church. Invest and plan conservatively so as not to put your savings or your family at risk. If you are married, always make money decisions together regardless if it is buying an investment or insurance. Keep emergency savings available. Protect your paychecks against your injury or illness with disability insurance and protect your family from financial distress by insuring your life. Pray and be thankful for what God has given you dominion over.
– Van Richards is a Christian financial advisor as well as the founder of https://www.Advice4LifeInsurance.com and http://www.Advice4Retirement.com. Van draws from his 30 years as a financial advisor to write about financial issues from a Christian perspective. You can contact him at van@advice4lifeinsurance.com.